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Forex Signal (Mon June 6 2011, 10:00am NY Time EST) - CA IVEY PMI

Discussion in 'Current Forex Trading Signals' started by Henry Liu, Jun 3, 2011.

  1. Henry Liu

    Henry Liu Former FPA Special Consultant

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    The Canada IVEY PMI will be released today. This release is considered a leading indicator that receives much attention from traders; especially when its released early in the week before the Employment report. Here's the forecast:

    10:00am (NY Time) CA IVEY PMI Forecast 58.4 Previous 57.7
    ACTION: USD/CAD BUY 55.5 SELL 61.5


    The Trade Plan
    Our tradable deviation factor is 3.0. IVEY PMI is usually tradable when its released before the Canadian Employment Change report. The IVEY PMI is a leading indicator used to predict future trends. The Employment Change is a lagging indicator which means its used to confirm if a trend is or isnt developing. Therefore, The IVEY PMI report should indicate in which direction the employment report will go.

    We'll look to BUY USDCAD if we get 55.5 or less. We'll look to SELL USDCAD if we get 61.5 or better. I'll be using Retracement Trading method. To find out more about my trading system, read:
    Henry Liu's Trading Method

    The Market
    The IVEY PMI is forecasted to grow for the month of May at an increased rating of 58.4. Yet, the rate of expansion remains weak. Canada continues to show strength-gain in the major economic sectors despite supply chain challenges associated with poor weather in the Pacific, especially the Japanese earthquake . Job growth is expected to remain on an encouraging pattern that saw significant gains in April. The increase in employment should lead us to believe that consumer spending rose which encourages purchase managers to anticipate a solid PMI release for April.

    Additional Thoughts
    USDCAD may not retrace much after a strong release. The retracement may also take place in the first 5 minutes so once we see a significant retracement, get ready to jump in.

    Pre-news Considerations
    No Pre-news trade for this release.

    DEFINITION
    The Ivey Purchasing Manager's Index (PMI) measures the activity level of purchasing managers from all sectors of the economy, 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 and Data for CA IVEY PMI



    Thanks,



    [​IMG]
     
    #1 Henry Liu, Jun 3, 2011
    Lasted edited by : Sep 8, 2016
  2. PipDog

    PipDog Corporal

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    Another Swing and a Miss...

    Again....why are telling folks to go against risk aversion, when it's the dominate factor in the forex market?

    Case in point: a huge deviation on the CAD Ivey...10 points!!!...meaning the USDCAD should go down. You did say to sell at a much lower deviation. This means you'd be selling the USD, on a day when the stock markets are down, risk aversion is in play, and the USD is strengthening. The resulting move had the USDCAD down by about 2 pips after the news, and has been up as much as 25 pips post news.

    Bad advice. Bad trade.

    Henry, you should feel an obligation to at least discuss this issue before advising folks to at best roll the dice, at worst give their money away.

    Come on.
     
  3. hollywood1111

    hollywood1111 Recruit

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    Interesting observation. I'll pay more attention next time. Lost about 10 pips in this trade.
     
  4. haerifar

    haerifar Recruit

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    hi Henry

    I also lost more money on this trade would you please give some information about this happening?
     

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