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Forex Signal (Thursday September 1, 2011 – 10:00am EDT) – US ISM Manufacturing PMI

Discussion in 'Current Forex Trading Signals' started by Stavro D'Amore, Aug 31, 2011.

  1. Stavro D'Amore

    Stavro D'Amore Former FPA Special Consultant

    Joined:
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    US ISM Manufacturing PMI
    Forecast 48.7
    Previous 50.9
    Pair to trade: USD/JPY and EUR/USD

    Numbers we need:
    BUY USD/JPY 51.2 or higher
    BUY EUR/USD 46.2 or lower


    Economical Impact: High
    Typical Result: Good for Currency
    Occurrence: monthly, on the first business day after the month ends
    Spike Probability: Good, we can see 45 pips on initial spike

    About our Triggers:
    US ISM Manufacturing Index forecasted to arrive at 48.7
    we are looking for a deviation of 2.5K either way on this trade.
    If we get 51.2 or better I will look to enter a LONG position on USD/JPY and if we get
    46.2 or lower deviation I will go LONG on EUR/USD.
    Should this report be triggered, we can expect to see about 45 pips on the initial spike on both pairs USD/JPY and EUR/USD. We have no known conflict for this release. This trade will have a good chance of a 30% retrace on the initial spike.

    What is it? And why does the market care?
    This data is considered a very important and trusted economic measure. If the index has a value below 50, due to a decrease in activity, it tends to indicate an economic recession, especially if the trend continues over several months. A value substantially above 50 likely indicates a time of economic growth. The ISM index is the result of a monthly survey of over 400 companies in 20 industries throughout the 50 states.
    The ISM's leading quality has been proven over time. During a recession, the ISM's bottom may precede the turning point for the economic cycle by some months.

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

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

    I do recommend spike trading as an option. Liquidity is very good at the moment if you are using an ECN broker. Please use no more than a 15 pip limit order to control slippage.

    I will look for a 30% retracement in the original spike 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 US ISM Manufacturing PMI

    All the best

    Stavro D’Amore
     
    #1 Stavro D'Amore, Aug 31, 2011
    Lasted edited by : Sep 8, 2016

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