Nickel settled up 4% at 1123.6 spurred by targeted RRR cuts by China’s central bank, rising New York Fed’s manufacturing index and US industrial output.  As China lowered deposit reserve ratio for more financial institutions, markets were boosted. US May industry output was also upbeat, pushing up nickel prices to strengthen further. Major economic data from the US will be released today, and boosted by deposit reserve ratio cut for more banks prices are expected to move up. The NY Empire State Index for June was reported Monday at a 4-year high of 19.28, beating the estimated 15, and US industrial output rose 0.6% MoM in May, well above April’s 0.6% fall. The country’s NAHB housing market index, also hit a high of 49 in June, last seen in January 14. The euro zone’s May inflation, however, rose only by 0.5% YoY and fell 0.1% MoM, far short of the ECB’s 2% target. US housing data and inflation reports from the UK and US due for release Tuesday are expected to be positive, helping boost base metals markets. Investors, however, should pay close attention to the US Federal Reserve’s latest interest rate meeting to be held on Thursday. LME nickel prices opened at USD 18,070/mt overnight, with the high end of the price range USD 18,734/mt, and finding support at USD 18,070/mt. Finally, LME nickel prices closed at USD 18,734/mt, up USD 654/mt from the previous trading day. Technically market is under short covering as market has witnessed drop in open interest by -1.27% to settled at 6634 while prices up 43.2 rupee, now Nickel is getting support at 1098.8 and below same could see a test of 1073.9 level, And resistance is now likely to be seen at 1136.7, a move above could see prices testing 1149.7.

Trading Ideas:

Nickel trading range for the day is 1073.9-1149.7.

Nickel rose spurred by targeted RRR cuts by China’s central bank, rising New York Fed’s manufacturing index and US industrial output.

The NY Empire State Index for June was reported at a 4-year high of 19.28, beating the estimated 15, and US industrial output rose 0.6%

The IMF said it now expects the U.S. economy to expand 2% in 2014, down from its forecast of 2.8% in April.