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Forex Signal (Wed August 4, 2010 4:30am EST NY Time) UK Services PMI

Discussion in 'Current Forex Trading Signals' started by Henry Liu, Aug 3, 2010.

  1. Henry Liu

    Henry Liu Former FPA Special Consultant

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    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 earlier this week, here’s the forecast:

    4:30am (NY Time) UK Services PMI Forecast 54.5 Previous 54.4
    ACTION: GBP/USD BUY 57.0 SELL 52.0


    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 worse release, 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
    With Sterling showing a strong sign of demand and relatively good outlook when compared to Euro and USD, it is likely that we'll see GBP/USD move to the levels above 1.60 or even to 1.70, as I have called this since last week.

    BOE will be releasing its interest rate decision this week, and it is likely a non-event as there is no expectation for change. However, the forecast for the outlook of the UK economy may be shifted from bearish to neutral as recent data supports a stronger GBP. The directional bias for GBP remains the same, which is to BUY on dips.

    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. With JPY coming to a strong support level (USDJPY 85.00) and BOJ threatening for possible intervention, GBP/JPY may be the biggest winner if this release is surprisingly high.

    GBP/USD is on the verge of breaking the 1.60, and a better than expected Services PMI may just do that. Market reaction beyond this level will determine if we'll see 1.70. I'll be watching closely at the 1.60 level as it is a strong psychological level.

    Pre-News Consideration
    There is no pre-news consideration for this release, but the general trend is to BUY GBP. If we see a drop in the GBP after the release, we could look for areas to enter on a LONG provided that it is not a broad USD strength or risk aversion sentiment... In other words, be very careful when you sell against the trend, it's better to wait for the effect of the news to die down and then position your trades for much better entry.

    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,


    [​IMG]
     
    #1 Henry Liu, Aug 3, 2010
    Lasted edited by : Sep 8, 2016
  2. webtrader

    webtrader Private

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    Happy Birthday Henry!!

    and many more.......................

    hopefully you take a pip break :) and enjoy your day with those that love and care for you.
     
  3. erelation

    erelation Recruit

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    Henry, I must say that your call on the pound is Great.

    I have close my GBP/USD position when it went down to 1.5591, or else i will be sitting on a 400 pips loss now. The only regret is that i haven't been able to enter into a long at that level. Thanks for the 400pips.

    Regards
    erelation




     
    #3 erelation, Aug 3, 2010
    Lasted edited by : Sep 8, 2016
  4. ochills

    ochills Master Sergeant

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    Ochills

    Happy Birthday frd
    Long LIFE and Prosperity and Love Life with your family
     
  5. Cancer0s

    Cancer0s Recruit

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    4:28

    Why Everywhere is written that it is 4:30? The realese was at 4:28 am. Now I am looking at some services and it is really 4:28.
     
  6. Za3eeM

    Za3eeM Recruit

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    from which point should we buy it ?
     

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