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Forex Signal (Tue May 3 2011, 4:30am NY Time EST) - UK Manufacturing PMI

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

  1. Henry Liu

    Henry Liu Former FPA Special Consultant

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    Manufacturing PMI is a leading indicator and it’s usually released during early month. Traders pay attention to this release for surprises as this survey may help to shape the general trend of the currency for the rest of the month. Here is the forecast:

    4:30am (NY Time) UK Manufacturing PMI Forecast 57.0 Previous 57.1
    ACTION: GBP/USD BUY 59.0 SELL 55.0

    The Trade Plan

    We are looking for a tradable deviation (or the difference between the forecast figure and the actual release figure) of 2.0, and because this is a leading indicator and its impact may hint that the future trend of other economic indicators (such as inventory, employment, retail sales, etc..), market usually reacts to this release with volatility if we get our deviation.

    We will be looking to BUY GBP/USD if we get a 59.0 or better, or looking to SELL GBP/USD if we get a 55.0 or worse, we’ll be using the Retracement Trading Method to trade this release.

    For more information on my trading methods, please read:
    Henry Liu's Trading Method


    The Market
    UK expects steady growth in the manufacturing report as the healthy pace continues through April. The manufacturing sector has been a bright spot during England’s economic recovery which grew 1.1 % from the previous quarter. Rising cost pressures may determine whether this index increases or decreases.

    If we do get a strong release, we’d be seeing a rather positive sign in the UK economy, which means that in addition to inflationary pressures, we are also going to have much better fundamental outlook.

    Additional Thoughts
    Officially we are going to be trading a Retracement Trade, but if we get a deviation of 4.0 points, it justifies for a spike trade.

    Pre-news Considerations
    There should be no pre-news for this release.

    DEFINITION
    “UK Manufacturing PMI is a survey of purchasing managers in the manufacturing sector on various economic activities, including inventory, employment, orders, etc… A higher than 50 reading means expansion, or a less than 50 reading means contraction.”


    Historical Chart and Data for UK Manufacturing PMI



    Thanks,


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

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