Nickel on MCX settled up 1.83% at 656.9 as some buying return as investors judged the recent selloff over the reversal of the Indonesian export ban overdone. The euro zone economy has kicked off the year robustly, data from the Baltic to the Mediterranean showed on Monday, evidence for the European Central Bank that its massive cash stimulus is working but also posing questions about what comes next. U.S. consumer spending accelerated in December as households bought motor vehicles and cold weather boosted demand for utilities amid a rise in wages, pointing to sustained domestic demand that could spur economic growth in early 2017. Nickel, mainly used as an anti-corrosive in steel alloys, rallied in 2016 on the back of a clampdown on mines in the Philippines which took over as the main supplier to China following an ore export ban in Indonesia in place since 2014. The market was rocked earlier this month when Indonesia abruptly announced a partial lifting of the ban allowing exports of up to 5.2 million tonnes of nickel ore this year. Supply from the Philippines may remain constrained. Final results of an audit of the mining sector in the Asian nation ordered by President Duterte is expected this week. Some 11 mines have already been shut down for failing to comply to stricter environmental rules and a further 20 are under threat. Demand for nickel could get a bump from fiscal stimulus in the US, but given the relatively small global share of US nickel consumption, the impact may be limited. Technically now Nickel is getting support at 647.6 and below same could see a test of 638.2 level, And resistance is now likely to be seen at 662.2, a move above could see prices testing 667.4.

Trading Ideas:

Nickel trading range for the day is 638.2-667.4.

Nickel gained as some buying return as investors judged the recent selloff over the reversal of the Indonesian export ban overdone.

Indonesian mines may export up to 5.2 million tonnes of nickel ore a year under the country's new rules, the mining minister said.

Global financial markets will be busy with central bank meetings in the week ahead, with policy decisions due in the U.S., U.K. and Japan.