Fresh selling seen in Nickel, open interest up by 1.92%
Commodity Online | May 27 2016
UPDATED 13:49:52 IST

MCX Mentha Oil likely to move in a range of 975.7-999.1

MCX Aluminium may trade between 136.1-139.3 levels

MCX Nickel likely to move in a range of 965.7-989.9

MCX Zinc under fresh selling; Support seen at 161.6

MCX Copper under long liquidation; Resistance seen at 468.6

Nickel on MCX settled down -0.59% at 558.70 dragged lower by expectations that a likely U.S. interest rate rise in the next two months will boost the dollar, although the metal remained on track for its weekly loss. The U.S. dollar declined from near a 10-week high against the euro as traders betting on a U.S. interest rates took profits on the greenback's recent gains. A weaker dollar boosts buying power for consumers paying with other currencies.

Meanwhile, Chinese factories, which typically slowdown over the northern hemisphere summer months, are scrimping on their orders, industry sources said. But still concerns about faltering growth in top metals user China also added to pressure on nickel. While the People's Bank of China will keep policy slightly loose to support the economy, which still faces downward pressure, the China Business News said on Thursday, citing a report written by the central bank's monetary policy team.  Meanwhile, the dollar has strengthened again, amid expectations that the U.S. Federal Reserve will pursue a faster pace of interest-rate increases.

Also Nickel tried to hold support although traders were surprised that increases have not been more substantial after positive Chinese import data earlier this week. Stocks fell 978 tonnes to 400,896 and remain at December 2015 lows. Cancelled warrants jumped 3,810 tonnes to 129,540 tonnes after 4,386 tonnes were freshly cancelled in Kaohsiung. Meanwhile Norilsk Nickel, the world’s largest nickel producer, estimates that about 70% of global production in this metal is currently loss-making. Technically market is under fresh selling as market has witnessed gain in open interest by 1.92% to settled at 23613, now Nickel is getting support at 554.4 and below same could see a test of 550.2 level, and resistance is now likely to be seen at 565.9, a move above could see prices testing 573.2.

Trading Ideas:
--Nickel trading range for the day is 550.2-573.2.
--Nickel dropped as developments on the supply-side also suggest caution and a less bullish view towards nickel.
--The People's Bank of China will keep policy slightly loose to support the economy, which still faces downward pressure.
--The U.S. Labor Department said initial jobless claims fell by 10,000 for the week ended on May 20 to 268,000, slightly below expectations of 275,000.

Courtesy: Kedia Commodities