Nickel settled 0.88% up at 904.30 as support seen after Bernanke expressed concern over the US economic outlook last Friday, raising market expectation over QE3. In response, LME nickel prices slightly increase after opening. Later, disappointing PMI from China and EU weighed down LME nickel prices but still failed to quash longs. The price increase was mainly higher expectation over QE3 on Bernanke’s remark at the central bank meeting. Meanwhile, the ECB Governing Council member Asmussen stated that the ECB Governing Council would discuss debt purchase at September meeting. The downbeat PMI from China fueled market expectation that Chinese government may adopt measures to prevent economy from slipping further. Close attention should be paid to interest rate meeting result from the ECB and other major central banks and the US nonfarm employment data due on Friday, which will affect base metal prices. Draghi announced overnight that the ECB may purchase short-term government bond from the secondary market, which will support base metal market. However, Moody’s put credit rating of ECB into negative and Germany's FM said Germany was against ECB’s financing for government budget. For today's session market is looking to take support at 895.9, a break below could see a test of 887.5 and where as resistance is now likely to be seen at 910.4, a move above could see prices testing 916.5.

Trading Ideas:

Nickel trading range for the day is 887.57-917.

Nickel gained after Bernanke expressed concern over US economic outlook last Friday, raising market expectation over QE3.

Disappointing PMI from China and EU weighed down LME nickel prices but still failed to quash longs.

Draghi announced overnight that the ECB may purchase short-term government bond from the secondary market