Henry Liu
Former FPA Special Consultant
- Messages
- 473
ISM or Institute for Supply Management is releasing its PMI (Purchasing Manager Index) and it is similar to the UK Services PMI as this release is targeting the services sectors. 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 NonManufact. PMI Forecast 58.4 Previous 57.3
ACTION: 60.9 BUY USDJPY / 55.9 BUY EURUSD
Trade Plan
U.S. ISM Non-Manufacturing PMI is better known as the U.S. Services PMI; the current expectation is above the 50 level at 58.4; as 50 is considered the medium point for the PMI’s, this release is considered as an expansion in the services sector.
We’ll be using a deviation of 2.5 points in order to BUY USD and 2.5 points in order to SELL USD. In the event that 60.9 is reached, we could see some USD strength and JPY weakness; however, if the opposite is true, or 55.9 figure is released, expect to see stronger EUR and possibly another strong sentiment driven US morning.
If our tradable releases are reached, there is a good expectation of 50 pips of market movement within the next 120 minutes on both USD/JPY and GBP/USD.
I’ll be using my retracement trading method for this release, for more information on my trading methods, please read:
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.
Considering the main focus of the day on the US ADP Employment Change and the upcoming NFP release on Friday, market may not react to it much.
All in all, the ISM Non-Manufacturing index is expected to rise just above 58.0, a slight increase from the March reading of 57.3. This is a strong indicator that the service sector is picking up pace.
Additional Thoughts
Nevertheless, market will be paying attention to the ISM Non-Manufacturing PMI as the majority of U.S’ work force is service related (around 90%?). Therefore a strong release in either direction will shift the current speculation of USD.
Pre-news Considerations
There are no pre-news trades for this release.
DEFINITION:
“The Institute of Supply Management (ISM) Non-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 Non-Manufacturing PMI
Thanks,
10:00am NY Time US ISM NonManufact. PMI Forecast 58.4 Previous 57.3
ACTION: 60.9 BUY USDJPY / 55.9 BUY EURUSD
Trade Plan
U.S. ISM Non-Manufacturing PMI is better known as the U.S. Services PMI; the current expectation is above the 50 level at 58.4; as 50 is considered the medium point for the PMI’s, this release is considered as an expansion in the services sector.
We’ll be using a deviation of 2.5 points in order to BUY USD and 2.5 points in order to SELL USD. In the event that 60.9 is reached, we could see some USD strength and JPY weakness; however, if the opposite is true, or 55.9 figure is released, expect to see stronger EUR and possibly another strong sentiment driven US morning.
If our tradable releases are reached, there is a good expectation of 50 pips of market movement within the next 120 minutes on both USD/JPY and GBP/USD.
I’ll be using my retracement trading method for this release, for more information on my trading methods, please read:
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.
Considering the main focus of the day on the US ADP Employment Change and the upcoming NFP release on Friday, market may not react to it much.
All in all, the ISM Non-Manufacturing index is expected to rise just above 58.0, a slight increase from the March reading of 57.3. This is a strong indicator that the service sector is picking up pace.
Additional Thoughts
Nevertheless, market will be paying attention to the ISM Non-Manufacturing PMI as the majority of U.S’ work force is service related (around 90%?). Therefore a strong release in either direction will shift the current speculation of USD.
Pre-news Considerations
There are no pre-news trades for this release.
DEFINITION:
“The Institute of Supply Management (ISM) Non-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 Non-Manufacturing PMI
Thanks,
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