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Forex Signal (Tue July 5 2011, 4:30am NY Time EST) - UK Services PMI

Discussion in 'Current Forex Trading Signals' started by Henry Liu, Jul 4, 2011.

  1. Henry Liu

    Henry Liu Former FPA Special Consultant

    Jul 5, 2010
    Likes Received:
    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愀 the forecast:

    4:30am (NY Time) UK Services PMI Forecast 53.5 Previous 53.8
    ACTION: GBP/USD BUY 56.0 SELL 51.0

    The Services PMI is tradable with a minimum deviation of 2.5 between the forecast and the actual release. If we get at least 57.0 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 52.0 or lower, GBP could weaken and we should look to SELL GBP/USD or GBP/JPY pairs. If the actual release is below the medium 50 level, then we should jump in (spike trade) and SELL GBP/USD or GBP/JPY pairs.

    Important Note: The only time I'd recommend a spike trade is when there is momentum pushing the currency which, regardless of spread and slippage, could result in a profit if you hold on to the trade.
    Use the after-news trading method. For more information on my methods:
    Henry Liu's Trading Method

    The Market
    UK economy continued to deteriorate and the market is gearing up for further sell-offs of GBP on any negative data. With 2nd Quarter GDP missing expectation, Manufacturing PMI disappointing the market, the Services PMI today will probably be a huge market mover if it surprises the market, in either direction.

    Additional Thoughts
    UK's economy is 87% Services related. If we get a strong release on this PMI, we could see GBP sentiment turn bullish regardless of the fact that the PMI release doesnt change the long-term trend. As a leading indicator released early in the month, it helps to define the trend for the rest of the month.

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

    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 Chart and Data for UK Services PMI


    #1 Henry Liu, Jul 4, 2011
    Lasted edited by : Sep 8, 2016
  2. Ndukwe

    Ndukwe Recruit

    Sep 4, 2009
    Likes Received:
    i need a good broker with minimum slippage

    can someone suggest a good fx broker with low slippage. thanks
  3. Callen

    Callen Recruit

    Jul 3, 2011
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    Just a difference of .3 can create such a strong spike. Wonderful!

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