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Forex Signal (Wed June 1 2011, 4:30am NY Time EST) -UK 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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    Manufacturing PMI is a leading indicator that is usually released early in the 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 54.2 Previous 54.6
    ACTION: GBP/USD BUY 56.2 SELL 52.2


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

    We’ll be looking to BUY GBP/USD if we get a 56.2 or better, or looking to SELL GBP/USD if we get a 52.2 or worse. We’ll use the Retracement Trading Method to trade this release.
    For more information, read:
    Henry Liu's Trading Method


    The Market
    The Manufacturing PMI Index is expecting a soft reading today. A worse than forecasted release could weigh heavily on the Pound. This could reinforce the limited growth outlook.

    Based on the last few Manufacturing PMI reports, the development of a downward trend may be confirmed after today’s release. UK isn’t well known for it’s manufacturing output and the struggling economy doesn’t provide support for this as well. Last week, BOE mentioned that the country is still looking for a solution to high inflation as consumer spending remains low. Therefore, Manufacturing PMI is going to take a hit as economic uncertainty lingers in the minds of policy makers and consumers.

    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,



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    #1 Henry Liu, May 31, 2011
    Lasted edited by : Sep 8, 2016

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