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Forex Signal (Thu February 3 2011, 4:30am NY Time EST) - UK Services PMI

Discussion in 'Current Forex Trading Signals' started by Henry Liu, Feb 2, 2011.

  1. Henry Liu

    Henry Liu Former FPA Special Consultant

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    We’ll be trading the UK Services Purchasing Manager Index today at 4:30am (NY Time). This is a leading indicator similar to the Manufacturing PMI that was released early this week, here’s the forecast:

    4:30am (NY Time) UK Services PMI Forecast 51.2 Previous 49.7
    ACTION: GBP/USD BUY 54.0 SELL 48.5


    The Services PMI is tradable with a minimum deviation of 2.5 between the forecast and the actual release. If we get at least 54.0 or better, we could see some demand in the GBP and we will consider BUYING GBP/USD or GBP/JPY pairs. If we get a 48.5 (anything below the medium 50 level), GBP could weaken and we should look to SELL GBP/USD or GBP/JPY pairs.

    I'll be trading this release using after news retracement trading method. For more information on my methods:
    Henry's news trading methods.

    The Market
    Due to the recent bullish sentiment in the Sterling, despite of the negative 4th quarter GDP release, traders are now more convinced that BOE's next move is going to be a rate hike, therefore any positive news is likely to spark another Sterling rally.

    However, if this release still comes at below 50, we could see some much needed consolidation for the currency, and perhaps provide a much better entry point to go LONG on a long-term timeframe towards the end of the day.

    Additional Thoughts
    UK’s economy is 73% Services related, if we get a strong release on this PMI, we could see GBP sentiment turn bullish. Even though this PMI release does not change the long-term trend, but as leading indicator and being released during the early part of the month usually helps to define the trend for the rest of the month.

    Pre-News Consideration
    There is no pre-news consideration for this release...

    DEFINITION:
    “The Chartered Institute of Purchasing and Supply (CIPS) Services Purchasing Manager’s Index (PMI) 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 data and charts for UK Services PMI


    Thanks,


    [​IMG]
     
    #1 Henry Liu, Feb 2, 2011
    Lasted edited by : Sep 8, 2016
  2. exlex

    exlex Recruit

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    Whats going on?

    Hi Henry

    I have noticed that recently the markets spike shortly before the scheduled time of relese of UK data as if some big players get the news a minute or so before we do. Is it only me or do you get the same.

    If so, wtf?

    Exlex
     
  3. Doug Buar

    Doug Buar Recruit

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    Hi Henry. Same question... Tonight, it was at 4:28 EST that the market moved almost 60 points, yet the news service to which I subscribe didn't have anything "on the wire" until a short bit after 4:30 EST. Consequently, I did not trade on a very nice move.

    Any ideas about why this sort of thing would happen? (See picture)

    [​IMG]

    And of course... THANK YOU for your very faithful help in making money in Forex.

    Doug
     

    Attached Files:

  4. Boko Maru

    Boko Maru Sergeant

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  5. loog12us

    loog12us Recruit

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    Yeah same thing happened this time also , i thought my cloak is lagging.....

    Can you please explain that
     
  6. Boko Maru

    Boko Maru Sergeant

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    This report is always released at 4:28am. Henry's post showing it coming out at 4:30am is simply wrong. Suggest checking the FPA news calendar (or some other reliable source) rather than just depending on good ol' Henry to always get it right :)
     
  7. m1refaat

    m1refaat Private

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    Yesterday, the dollar did strengthen marginally on signs of an escalation of the current unrest in Egypt which coincided with a general stalling of the risk rally. A better ADP employment report also helped the Dollar's cause, but market participants seem reluctant to read too much into this ahead of Friday's official non-farm payrolls report. Fed Chairman Bernanke is due to speak later today on "The Economic Outlook and Macroeconomic Policies". General consensus has it that he will have to change tack significantly from the most recent FOMC statement to really affect the dollar, but his comments on inflation will be interesting having recently said that the risk of deflation has "receded considerably," whilst the FOMC themselves noted only that "measures of underlying inflation have been trending downward."
     
  8. Maluco

    Maluco Private

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    That released was odd to me too.

    I went for a pee and I returned just to see that massive green bar on my chart... WTF!
     
  9. PipDog

    PipDog Corporal

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    Here's the Reason for 4:28 am Release...


    This report often comes out 2 minutes early, as many of the UK news does. Read below off the Forex Factory website.

    BTW...that was a good trade! Sorry you missed out. But, it would of been hard to make much (and not lose) using the "Henry Retracement Method" as the GBPUSD ran out of steam about 20 minutes post-news and has reversed very hard. I traded the spike and got filled at 1.6249 and averaged out at 16 pips of profit.

    Forex Factory
     
  10. PipDog

    PipDog Corporal

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    Early Report

    It is standard procedure for UK announcements to come out at 4:28 (though not all). See below from Forex Factory:

    Data is given to Thomson Reuters subscribers 2 minutes before the public release time listed on the calendar - early market reaction is usually a result of trades made by these subscribers. Above 50.0 indicates industry expansion, below indicates contraction. Full reports are only available via subscription;
     

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