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Forex Signal (Wed, September 1 2010, 4:30am NY Time EST) - UK Manufacturing PMI

Discussion in 'Current Forex Trading Signals' started by Henry Liu, Aug 31, 2010.

  1. Henry Liu

    Henry Liu Former FPA Special Consultant

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    Manufacturing PMI is a leading indicator and it’s usually released during early month. Traders pay attention to this release for surprises as this survey may help to shape the general trend of the market. Here is the forecast:

    4:30am (NY Time) UK Manufacturing PMI Forecast 57.1 Previous 57.3
    ACTION: GBP/USD BUY 59.1 SELL 55.0

    The Trade Plan

    We are looking for a tradable deviation (or the difference between the forecast figure and the actual release figure) of 2.0, and because this is a leading indicator and its impact may hint that the future trend of other economic indicators (such as inventory, employment, retail sales, etc..) , therefore market should react to this release with volatility if we get our deviation.

    We will be looking to BUY GBP/USD if we get a 59.1 or better, or looking to SELL GBP/USD if we get a 55.0 or worse, we’ll be using the Retracement Trading Method to trade this release. For more information, read:
    Henry's News Trading Method

    The Market
    The Manufacturing PMI is forecasted at 57.1. Since PMI’s medium point is at 50, this forecast is considered as a positive release (above the 50 level means expansion in the manufacturing sector). If we get a 60 or better release, we should see some strong demand in the GBP especially after the past few days of heavy GBP sell-offs.

    Additional Thoughts
    We can expect GBP/USD to move 50 pips within the hour if our tradable figures are hit. I'm expecting to see demand rise for GBP even on an inline with expectation release due to the recent rapid depreciation of GBP, making it somewhat undervalued in the short term.

    Pre-news Considerations
    Since this is a leading indicator and the market has remained at the current level (56~58) since February, I am not expecting any pre-news sentiment.

    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 & Data For UK Manufacturing PMI

    Thanks,


    [​IMG]
     
    #1 Henry Liu, Aug 31, 2010
    Lasted edited by : Sep 8, 2016
  2. pdxdonsmith

    pdxdonsmith Recruit

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    Always retracement?

    Henry, do you ever use a method other than retracement? I'm curious, because I'm pretty sure all of the releases I've read, you've used your retracement method for the trade, and I'm wondering if you ever set OCO orders in advance or if you always just use the retrace?

    On this particular trade, are you suggesting that cable is undervalued here and an upside surprise will see more reaction than a downside surprise?

    I love what you do, and learn every day. Thanks.
     
  3. leon_bbc

    leon_bbc Recruit

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    Hi henry,
    How you doin?
    I used your sentiment analysis for Australia GDP report, and I got over 90 pips!
    unfortunately I executed my trade on a demo account.
    but I found out that you were right !!
    Thank you Henry ;)
     
  4. fridayseth

    fridayseth Recruit

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    Hi

    Henry,
    Thanx for ur good analysis.Really enjoying u.could u tell me the broker u trade with?
     
  5. Huwee

    Huwee Corporal

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    Thanks Henry! Waited a minute for the retracement (and the Forex Peace Army calendar to refresh!) and justed exited the trade with +41 pips.

    Huwee
     
  6. swingfiddle

    swingfiddle Private

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    can you tell me please the exact time of your entrance and exit?you went short right?
     

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