Henry Liu
Former FPA Special Consultant
- Messages
- 473
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 52.5 Previous 52.6
ACTION: GBP/USD BUY 55.0 SELL 49.9
The Services PMI is tradable with a minimum deviation of 2.5 between the forecast and the actual release. If we get at least 55.0 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 49.9 (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 MPC Meeting Minutes from BOE with 3 votes for rate hike, traders are now more convinced that BOE's next move is going to be tightening, 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,
4:30am (NY Time) UK Services PMI Forecast 52.5 Previous 52.6
ACTION: GBP/USD BUY 55.0 SELL 49.9
The Services PMI is tradable with a minimum deviation of 2.5 between the forecast and the actual release. If we get at least 55.0 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 49.9 (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 MPC Meeting Minutes from BOE with 3 votes for rate hike, traders are now more convinced that BOE's next move is going to be tightening, 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,
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