10:00am NY Time
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 53.3 Previous 52.4
ACTION: 56.0 SELL EURUSD/ 50.0 SELL USDJPY
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.
Trade PlanWe´ll be looking for around 2.5 ~ 3.3 points of deviation for this trade. If a 56.0 or better number is released, we could see some USD strength, thererefore SELL EURUSD. If the opposite is true, or 50.0 figure is released, expect to see weaker USD in the short term, therefore we should SELL USDJPY.
If our tradable releases are reached, there is a good expectation of 50 pips of market movement within the next 60 minutes on EURUSD.
Book : Attacking Currency Trends: How to Anticipate and Trade the Big Moves - Greg Miichalowski
Getting Started in Forex Trading Strategies - Michael Duane Archer
Book : Sentiment in the Forex Market - Jamie Saettele
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