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Forex Signal (Wed April 6 2011, 10:00am NY Time EST) - CA IVEY PMI

Discussion in 'Current Forex Trading Signals' started by Henry Liu, Apr 6, 2011.

  1. Henry Liu

    Henry Liu Former FPA Special Consultant

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    We'll be getting Canada IVEY PMI today, since this is a leading indicator, traders pay attention for this release, especially during the same week prior to Canada Employment Changes. Here's the forecast:

    10:00am (NY Time) CA IVEY PMI Forecast 65.0 Previous 69.3
    ACTION: USD/CAD BUY 62.0 SELL 68.0


    The Trade Plan
    Our tradable surprise factor is 3.0. IVEY PMI is usually tradable before the Canadian Employment Changes, however it is important to note that IVEY PMI is a leading indicator and Employment Change is a lagging indicator, and both are figures from different month but the consensus is that if we are starting this month on a positive note, the previous month should not be too far behind.

    We'll look to BUY USDCAD if we get 62.0 or less, and we'll look to SELL USDCAD if we get 68.0 or better. I'll be using Retracement Trading method. To find out more about my trading system, read:
    Henry's News Trading Methods.

    The Market
    We’ll focus on the IVEY PMI (IVEY Purchasing Manager’s Index) from Canada today, it is the equivalent of both ISM PMI’s out of US where purchasing managers of all sectors of the economy participate in this survey. And as with PMIs, they are all considered as leading indicators with the medium point at 50, therefore a reading of above 50 would be considered as expansion in the economy whereas a reading below 50 would be considered as contraction in the economy.

    With Canadian Dollar gaining across the board on the back of record highest crude oil price for the past 12 months, a stronger than expected release could push USDCAD down to the 0.9600 level once again... However, on a weaker than expected release, we should see USDCAD move above 0.9700.

    Additional Thoughts
    USDCAD may not retrace much after a strong release, the retracement may also take place in the first 5 minutes, so once we see a significant retracement, get ready to jump in.

    Also keep in mind that USDCAD has been trading around the 0.9600 level but unable to break below, therefore I'd definitely be watching this level for possible reversals.

    Pre-news Considerations
    No Pre-news trade for this release.

    DEFINITION
    “The Ivey Purchasing Manager’s Index (PMI) measures the activity level of purchasing managers from all sectors of the economy, 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 & Data For IVEY PMI

    Thanks,


    [​IMG]
     
    #1 Henry Liu, Apr 6, 2011
    Lasted edited by : Sep 8, 2016

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