Henry Liu
Former FPA Special Consultant
- Messages
- 473
We’ll be trading the UK Services Purchasing Manager Index today at 4:30am (NY Time). This is a leading indicator similar to the Manufacturing PMI that was released early on this week, here’s the forecast:
4:30am (NY Time) UK Services PMI Forecast 53.2 Previous 53.2
ACTION: GBP/USD BUY 55.2 SELL 49.9
The Services PMI is tradable with a minimum deviation of 2.5 between the forecast and the actual release. If we get at least 55.2 or better, we could see some demand in the GBP and we will consider BUYING GBP/USD or GBP/JPY pairs. If we get a 49.9 (anything below the medioum 50 level), GBP could weaken and we should look to SELL GBP/USD or GBP/JPY pairs.
I'll be trading this release using after news retracement trading method. For more information on my methods:
Henry's news trading methods.
The Market
With recent UK data showing strong fundamental outlook and inflation, market has been neutral towards Sterling... Even with the risk aversion sentiment brought on by European debt crisis, GBP still traded stronger other currencies in the region.
If we do get a strong release, market demand for GBP will surely rise; if we do get a weak release, we could see a moderate sell-off as current market is consolidating USD strength sparked by Trichet's Press Conference.
Additional Thoughts
UK’s economy is 73% Services related, if we get a strong release on this PMI, we could see GBP sentiment turn bullish.
Pre-News Consideration
There is no pre-news consideration for this release, and even if there is a possible trend developing, I'd warn against it since this week is packed with economic news releases...
DEFINITION:
“The Chartered Institute of Purchasing and Supply (CIPS) Services Purchasing Manager’s Index (PMI) measures the activity level of purchasing managers in the services sector, with a reading above 50 indicating expansion. A rising trend has a positive effect on the nation’s currency. To produce the index, purchasing managers are surveyed on a number of subjects including employment, production, new orders, supplier deliveries, and inventories. Traders watch these surveys closely because purchasing managers, by virtue of their jobs, have early access to data about their company’s performance, which can be a leading indicator of overall economic performance.”
Historical data and charts for UK Services PMI
Thanks,
4:30am (NY Time) UK Services PMI Forecast 53.2 Previous 53.2
ACTION: GBP/USD BUY 55.2 SELL 49.9
The Services PMI is tradable with a minimum deviation of 2.5 between the forecast and the actual release. If we get at least 55.2 or better, we could see some demand in the GBP and we will consider BUYING GBP/USD or GBP/JPY pairs. If we get a 49.9 (anything below the medioum 50 level), GBP could weaken and we should look to SELL GBP/USD or GBP/JPY pairs.
I'll be trading this release using after news retracement trading method. For more information on my methods:
Henry's news trading methods.
The Market
With recent UK data showing strong fundamental outlook and inflation, market has been neutral towards Sterling... Even with the risk aversion sentiment brought on by European debt crisis, GBP still traded stronger other currencies in the region.
If we do get a strong release, market demand for GBP will surely rise; if we do get a weak release, we could see a moderate sell-off as current market is consolidating USD strength sparked by Trichet's Press Conference.
Additional Thoughts
UK’s economy is 73% Services related, if we get a strong release on this PMI, we could see GBP sentiment turn bullish.
Pre-News Consideration
There is no pre-news consideration for this release, and even if there is a possible trend developing, I'd warn against it since this week is packed with economic news releases...
DEFINITION:
“The Chartered Institute of Purchasing and Supply (CIPS) Services Purchasing Manager’s Index (PMI) measures the activity level of purchasing managers in the services sector, with a reading above 50 indicating expansion. A rising trend has a positive effect on the nation’s currency. To produce the index, purchasing managers are surveyed on a number of subjects including employment, production, new orders, supplier deliveries, and inventories. Traders watch these surveys closely because purchasing managers, by virtue of their jobs, have early access to data about their company’s performance, which can be a leading indicator of overall economic performance.”
Historical data and charts for UK Services PMI
Thanks,
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