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Forex Signal (Mon, August 2 2010, 4:30am NY Time EST) - UK Manufacturing PMI

Discussion in 'Current Forex Trading Signals' started by Henry Liu, Aug 1, 2010.

  1. Henry Liu

    Henry Liu Former FPA Special Consultant

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    Manufacturing PMI is a leading indicator and it’s usually released during early month. Traders pay attention to this release for surprises as this survey may help to shape the general trend of the market. Here is the forecast:

    4:30am (NY Time) UK Manufacturing PMI Forecast 57.1 Previous 57.5
    ACTION: GBP/USD BUY 59.1 SELL 55.0


    The Trade Plan
    We are looking for a tradable deviation (or the difference between the forecast figure and the actual release figure) of 2.0, and because this is a leading indicator and its impact may hint that the future trend of other economic indicators (such as inventory, employment, retail sales, etc..) , therefore market should react to this release with volatility if we get our deviation.

    We will be looking to BUY GBP/USD if we get a 59.1 or better, or looking to SELL GBP/USD if we get a 55.0 or worse, we'll be using the Retracement Trading Method to trade this release.

    For more information on my trading system:
    Henry Liu's Trading Methods

    The Market
    The Manufacturing PMI is forecasted at 57.1. Since PMI’s medium point is at 50, this forecast is considered as a positive release (above the 50 level means expansion in the manufacturing sector). If we get a 60 or better release, we should see some strong demand in the GBP. If we were to get a 55 or worse, market's reaction could be muted or somewhat limited.

    With BOE rendering its rate decision on Thursday, market could be sitting on the sideline waiting for direction. We should do the same. It is possible some BOE officials could be commenting this week prior to the rate decision, so trust me on sitting on the sidelines, you'll thank me later.

    Additional Thought
    We can expect GBP/USD to move 50 pips within the hour if it is hit. With GBP gaining momentum in the past few weeks and the fact that fundamental outlook from UK is looking much better compared to both US and Europe, it is possible we may see limited decline even if we get our SELL deviation. I'd be careful at taking a SELL trade from this release...

    Pre-Market Sentiment
    The should be no pre-market sentiment, even if there were, we should ignore it as this is not a trend changing release. Pre-market sentiments usually takes place when we have trend changing release such as the CPI, GDP, or Interest Rate decision.

    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 Data & Chart For UK Manufacturing PMI


    Thanks,


    [​IMG]
     
    #1 Henry Liu, Aug 1, 2010
    Lasted edited by : Sep 8, 2016
  2. Ilodibe Odinaka

    Ilodibe Odinaka Recruit

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    thanks henry for your insight.
     
  3. bobyanwus1

    bobyanwus1 Recruit

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    Thanks Henry for the infor.
     
  4. Mohammad Hamdy

    Mohammad Hamdy Recruit

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    thanks for the Info Henry ..
    the actual turned out to be 57.3 almost the same as expected 57.1
    so no trade .
     
  5. Graememc

    Graememc Recruit

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    Well that was a non event.
     
  6. thunderheart

    thunderheart Recruit

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    Market kinda moved way in advance during UK open and guess it was as expected data release.
     
  7. Andrenoidx

    Andrenoidx Recruit

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    Not much of gap between forecast and actual... Close all PO. :(
     
  8. purplerowt

    purplerowt Recruit

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    Henry,

    Please know how much you are truly appreciated. Thanks to you, I sat this one out. Lookig forward to the next one. Take care!
     

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