Henry Liu
Former FPA Special Consultant
- Messages
- 473
Manufacturing PMI is a leading indicator that is usually released early in the month. Traders pay attention to this release for surprises as this survey may help to shape the general trend of the currency for the rest of the month.
Here is the forecast:
4:30am (NY Time) UK Manufacturing PMI Forecast 52.2 Previous 52.1
ACTION: GBP/USD BUY 54.2 SELL 49.2
The Trade Plan
We’re looking for a tradable deviation (or the difference between the forecast figure and the actual release figure) of 2.0. Since this is a leading indicator and its impact may hint the future trend of other economic indicators (such as inventory, employment, retail sales, etc..), the market usually reacts to this release with volatility if we get our deviation.
We’ll be looking to BUY GBP/USD if we get a 54.2 or better, or looking to SELL GBP/USD if we get a 49.2 or worse. We’ll use the Retracement Trading Method to trade this release. For more information, read:
Henry Liu's Trading Method
The Market
Recent data out of UK have been disappointing, to say the least. With a fresh new month, quarter, and the start of the 2nd half of 2011, this data will add weight to how traders view Sterling...
With global manufacturing activities falling short due to supply congestions from Japan, it could be anyone's guess as how this PMI release is going to be... If we get a better than expected figure, I'd expect some rebound in GBP as it has been sold off against all other majors due to diminished rate hike possibilities by the BOE. If we get a worse than expected release, then GBP may accelerate its loss in today's trading session.
Additional Thoughts
Officially we are going to be trading a Retracement Trade, but if we get a deviation of 4.0 points, it justifies for a spike trade.
Pre-news Considerations
There should be no pre-news for this release.
DEFINITION
"UK Manufacturing PMI is a survey of purchasing managers in the manufacturing sector on various economic activities, including inventory, employment, orders, etc... A higher than 50 reading means expansion, or a less than 50 reading means contraction."
Historical Chart and Data for UK Manufacturing PMI
Thanks,
Here is the forecast:
4:30am (NY Time) UK Manufacturing PMI Forecast 52.2 Previous 52.1
ACTION: GBP/USD BUY 54.2 SELL 49.2
The Trade Plan
We’re looking for a tradable deviation (or the difference between the forecast figure and the actual release figure) of 2.0. Since this is a leading indicator and its impact may hint the future trend of other economic indicators (such as inventory, employment, retail sales, etc..), the market usually reacts to this release with volatility if we get our deviation.
We’ll be looking to BUY GBP/USD if we get a 54.2 or better, or looking to SELL GBP/USD if we get a 49.2 or worse. We’ll use the Retracement Trading Method to trade this release. For more information, read:
Henry Liu's Trading Method
The Market
Recent data out of UK have been disappointing, to say the least. With a fresh new month, quarter, and the start of the 2nd half of 2011, this data will add weight to how traders view Sterling...
With global manufacturing activities falling short due to supply congestions from Japan, it could be anyone's guess as how this PMI release is going to be... If we get a better than expected figure, I'd expect some rebound in GBP as it has been sold off against all other majors due to diminished rate hike possibilities by the BOE. If we get a worse than expected release, then GBP may accelerate its loss in today's trading session.
Additional Thoughts
Officially we are going to be trading a Retracement Trade, but if we get a deviation of 4.0 points, it justifies for a spike trade.
Pre-news Considerations
There should be no pre-news for this release.
DEFINITION
"UK Manufacturing PMI is a survey of purchasing managers in the manufacturing sector on various economic activities, including inventory, employment, orders, etc... A higher than 50 reading means expansion, or a less than 50 reading means contraction."
Historical Chart and Data for UK Manufacturing PMI
Thanks,
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