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Forex Signal (Wed June 1 2011, 10:00am NY Time EST) - US ISM Manufacturing PMI

Discussion in 'Current Forex Trading Signals' started by Henry Liu, May 31, 2011.

  1. Henry Liu

    Henry Liu Former FPA Special Consultant

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    ISM or Institute for Supply Management is releasing its PMI (Purchasing Manager Index) today. As a leading indicator, traders generally pay attention to this report for hints of economic trend.

    Here's the forecast:

    10:00am NY Time US ISM Manufacturing PMI Forecast 58.1 Previous 60.4
    ACTION: 60.6 BUY USDJPY / 55.6 BUY EURUSD


    Trade Plan
    We'll be looking for around 2.5 points of deviation for this trade. If a 60.6 or better number is released, we could see some USD strength and JPY weakness, thererefore a BUY on the USD/JPY. If the opposite is true, or 55.6 figure is released, expect to see weaker USD in the short term, therefore we should BUY EURUSD (or GBPUSD).

    If our tradable releases are reached, there is a good expectation of 50 pips of market movement within the next 60 minutes on USD/JPY or EURUSD. I'll also be looking to trade other JPY crosses as they may all exhibit similar movements using my Retracement Trading Method:
    Henry Liu's Trading Method

    The Market
    ISM PMI's are leading indicator as stated before, and usually they do not affect the long-term trend of the market, unless we get a huge surprise. Yet, ISM Maufacturing should report solid expansion for May but at a slower pace. The Manufacturing report accounts for 12% of economic output and strong demand for U.S. exports should continue on a progressive pattern. Manufacturing rate production will indicate that bad weather conditions across the Pacific as well as high energy costs are rippling through the U.S.

    Additional Thoughts
    With the possibility of USD mounting a strong comeback, this is the first real data that would provide insight towards the NFP on Friday, therefore on a strong surprise, market may move strongly...

    Pre-news Considerations
    There are no pre-news trades for this release.

    DEFINITION:
    The Institute of Supply Management (ISM) Manufacturing Index 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 US ISM Manufacturing PMI



    Thanks,



    [​IMG]
     
    #1 Henry Liu, May 31, 2011
    Lasted edited by : Sep 8, 2016

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