1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

Forex Signal (Monday March 5, 2012 – 4:30am EDT) – UK Services PMI

Discussion in 'Current Forex Trading Signals' started by Stavro D'Amore, Mar 4, 2012.

  1. Stavro D'Amore

    Stavro D'Amore Former FPA Special Consultant

    Joined:
    Jul 29, 2011
    Messages:
    547
    Likes Received:
    1
    Hello all,

    Today we have UK Services PMI is a leading indicator and it is monthly, on the third business day after the month ends. Traders look at this indicator because It's a leading indicator of economic health - businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company's view of the economy

    UK Services PMI
    Forecast 55
    Previous 56
    Pair to trade: GBP/USD

    Numbers we need:
    BUY GBP/USD 57.5
    SELL GBP/USD 52.5

    Economical Impact: High
    Typical Result: Good for Currency
    Occurrence: monthly, on the third business day after the month ends
    Spike Probability: Good, we can see 30 pips on initial spike

    About our Triggers:
    UK Services PMI forecasted to arrive at 55
    We are looking for a deviation of 2.5 to the upside to BUY GBP/USD and a deviation of 2.5 to the downside to SELL GBP/USD
    So the summary is we get 57.5 or better I will look to enter a LONG position on GBP/USD and if we get 52.5 or lower I will go SHORT on GBP/USD
    Should this report be triggered, we can expect to see about 30 pips on the initial spike .
    This trade will have a good chance of a 30% retrace on the initial spike so I recommend trading the retracement method as stated bellow.

    What is it? And why does the market care?
    UK Services PMI measures the activity level of purchasing managers in the services sector.
    Any reading above 50 indicates expansion, while a reading below 50 indicates contraction.
    It gives an indication about the health of the services industry in the UK. Traders watch these surveys closely as purchasing managers usually have early access to data about their company’s performance, which can be a leading indicator of overall economic performance.

    A higher than expected reading should be taken as positive/bullish for the GBP
    A lower than expected reading should be taken as negative/bearish for the GBP.

    Method I use to trade this:
    Stavro D’Amore Trading Method

    See my Views on current Euro crisis

    I do recommend spike trading as an option. If you are using an ECN broker or a broker that allows spike fills. Please use no more than a 15 pip limit order to control slippage.

    I will look for a 30% retracement in the original spike if our triggers are hit before entering. I will be looking at a 5 minute chart. I will sell half my position as soon as I hit the original high point of the first initial spike and place a SL at the original spike price.

    My TP level would be just before a resistance level or if the chart decides to form a support level, looking at a 15 minute chart time frame to analyze this.

    Historical Chart and Data for UK Services PMI

    All the best

    Stavro D’Amore
     
    #1 Stavro D'Amore, Mar 4, 2012
    Last edited: Mar 4, 2012
  2. barry101

    barry101 Private

    Joined:
    May 24, 2009
    Messages:
    22
    Likes Received:
    0
    Thanks Stavro, and you may want to correct this typo:

     

Share This Page