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Forex Signal (Wednesday April 4, 2012 – 4:28am EDT) – UK Services PMI

Discussion in 'Current Forex Trading Signals' started by Stavro D'Amore, Apr 4, 2012.

  1. Stavro D'Amore

    Stavro D'Amore Former FPA Special Consultant

    Jul 29, 2011
    Likes Received:

    Please see my trade plan below.

    UK Services PMI
    Forecast 53.3
    Previous 53.8
    Pair to trade: GBP/USD

    Numbers we need:
    BUY GBP/USD if we get 55.3 or higher (deviation +2)
    SELL GBP/USD if we 51.3 or lower (deviation -2)

    Economical Impact: High
    Typical Result: Good for Currency
    Occurrence: on the first business day after the month ends
    Spike Probability: Good, we can see 30 pips on initial spike

    About our Triggers:
    UK services PMI is forecasted to arrive at 53.3
    We are looking for a deviation of 2 either way on this trade.
    If we get 55.3 or better I will look to enter a LONG position on GBP/USD and if we get
    51.3 or lower I will go SHORT on GBP/USD.
    Should this report be triggered, we can expect to see about 30 pips on the initial spike. We have no known conflict for this release. This trade will have a good chance of a 30% retrace on the initial spike, please use 10 pip slippage controls or limit order

    What is it? And why does the market care?
    It's a leading indicator of economic health - businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company's view of the economy. Traders watch these surveys closely as purchasing managers usually have early access to data about their company’s performance, which can be a leading indicator of overall economic performance.

    A higher than expected reading should be taken as positive/bullish for the GBP
    A lower than expected reading should be taken as negative/bearish for the GBP.

    Method I use to trade this:
    Stavro D’Amore Trading Method

    Focus on the Euro
    See my euro analysis

    I will look for a 30% retracement in the original spike before entering a trade; I will Close half my position as soon as I hit the original high point of the first initial spike and place a SL at entry price. My TP level would be just before a resistance level or if the chart decides to form a support level, looking at a 15 minute chart time frame.

    I do recommend spike trading as an option; also the liquidity is very good at the moment if you are using an ECN broker.

    Historical Chart and Data for UK Services PMI

    All the best

    Stavro D’Amore

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