Nickel yesterday traded with the negative node and settled -1.67% down at 830.4 as upbeat data sparked expectations that the Fed will bring QE3 to an end early, weighing down prices. PMI in euro zone and Germany was 47.8 and 49.0, respectively, both better than the previous month and expectations, pulling up nickel prices slightly. US job data and house figures were also both better than forecasts, but the US dollar index was not affected. HSBC's flash China manufacturing PMI for May slipped unexpectedly to 49.6, a fresh 7-month low, fuelling apprehension over slowdown in the world's second largest economy. Japanese government bond yields soared to 1% on Thursday due to aggressive sell-off. As a result, investors took profits, causing Nikkei 225 to plummet 7.3%, the largest single day decline since March 2011. On the other hand, easing monetary policy in Japan remains in place. The Bank of Japan announced it will inject JPY 2 trillion into financial markets next Monday. PMI in France, Germany and the euro zone in May all topped forecasts, but still pointed to contraction. Therefore, the euro zone economy may shrink another 0.2% in the second quarter. Better-than-expected data did little to lift investor sentiment. In yesterday's trading session nickel has touched the low of 822.7 after opening at 841, and finally settled at 830.4. For today's session market is looking to take support at 821.7, a break below could see a test of 813.1 and where as resistance is now likely to be seen at 840, a move above could see prices testing 849.7.

Trading Ideas:

Nickel trading range for the day is 813.07-850.

Nickel dropped as upbeat data sparked expectations that the Fed will bring QE3 to an end early, weighing down prices.

HSBC's May PMI for China was 49.6, falling far short of expectations and previous month, indicating a contraction in China's manufacturing.

China April refined nickel imports rose by 64% y/y to 14.8Kt, which was also up slightly m/m by 7%.