Henry Liu
Former FPA Special Consultant
- Messages
- 473
ISM or Institute for Supply Management is releasing its PMI (Purchasing Manager Index) and it is similar to the UK Manufacturing PMI as this release is targeting the Manufacturing sector. As a leading indicator, traders generally pay attention to this report for hints of economic trend. Here’s the forecast:
10:00am NY Time US ISM Manufacturing PMI Forecast 54.5 Previous 56.3
ACTION: 57.0 BUY USDJPY / 52.0 BUY EURUSD
The Trade Plan
We’ll be looking for 2.5 points of deviation for this trade. If a 57.0 or better number is released, we could see some USD strength and JPY weakness, thererefore a BUY on the USD/JPY. If the opposite is true, or 52.0 figure is released, expect to see weaker USD in the short term, therefore we should BUY EURUSD.
If our tradable releases are reached, there is a good expectation of 50 pips of market movement within the next 60 minutes on USD/JPY or EURUSD. I’ll also be looking to trade other JPY crosses as they may all exhibit similar movements using my Retracement Trading Method.
Henry's News Trading Method
The Market
U.S. ISM Manufacturing PMI current expectation is above the 50 level at 54.5, as 50 is considered the medium point for the PMI’s, this release is considered as expansion in the manufacturing sector. ISM PMI’s are leading indicator as stated before, and usually they do not affect the long-term trend of the market, unless we get a huge surprise.
However, with this being the first major release for the month, for the quarter, plus with NFP coming up next week, traders will exaggerate if we do get a strong release...
Additional Thought
Since NY traders will be waiting for this release to be out of the way before committing to a position, volatility may be high but there is no way to predict the direction… Therefore unless we get our tradable release, we should stay out…
Pre-news Consideration
Since PMI's are not trend changing releases, there should be no overwhelming sentiment prior to the release.
DEFINITION
“The Institute of Supply Management (ISM) Manufacturing Index 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 Chart & Data US ISM Manufacturing PMI
Thanks,
10:00am NY Time US ISM Manufacturing PMI Forecast 54.5 Previous 56.3
ACTION: 57.0 BUY USDJPY / 52.0 BUY EURUSD
The Trade Plan
We’ll be looking for 2.5 points of deviation for this trade. If a 57.0 or better number is released, we could see some USD strength and JPY weakness, thererefore a BUY on the USD/JPY. If the opposite is true, or 52.0 figure is released, expect to see weaker USD in the short term, therefore we should BUY EURUSD.
If our tradable releases are reached, there is a good expectation of 50 pips of market movement within the next 60 minutes on USD/JPY or EURUSD. I’ll also be looking to trade other JPY crosses as they may all exhibit similar movements using my Retracement Trading Method.
Henry's News Trading Method
The Market
U.S. ISM Manufacturing PMI current expectation is above the 50 level at 54.5, as 50 is considered the medium point for the PMI’s, this release is considered as expansion in the manufacturing sector. ISM PMI’s are leading indicator as stated before, and usually they do not affect the long-term trend of the market, unless we get a huge surprise.
However, with this being the first major release for the month, for the quarter, plus with NFP coming up next week, traders will exaggerate if we do get a strong release...
Additional Thought
Since NY traders will be waiting for this release to be out of the way before committing to a position, volatility may be high but there is no way to predict the direction… Therefore unless we get our tradable release, we should stay out…
Pre-news Consideration
Since PMI's are not trend changing releases, there should be no overwhelming sentiment prior to the release.
DEFINITION
“The Institute of Supply Management (ISM) Manufacturing Index 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 Chart & Data US ISM Manufacturing PMI
Thanks,
Last edited by a moderator:
