US ISM Manufacturing PMI 02/01/10

10:00am NY Time  US ISM Manufacturing PMI     Forecast 55.5  Previous 54.9
ACTION:   BUY 58.0      SELL 53.0      USD/JPY

Our focus today is to trade the ISM Manufacturing PMI during the New York Trading session, and our tradable deviation for a safe trade is 2.5 points either way.  In the event we get a better than expected release, this could once again fuel the recent bullish rally of USD; however, if the release is negative, below or close to the medium 50 level, we could see some correction in the recent rally of the greenback…  Since this is a leading indicator, investors pay more attention to this release for signs of market direction this month and possibly trend change.

However, with the market still just starting this year, we’ll have to pay more attention to the premarket sentiment before jumping into a trade.  In the grand scheme of things, this release shouldn’t really affect the long-term trend of the USD should we get a negative release, but in the case of a positive release, expect to see further downward moves in EUR/USD and GBP/USD.

DEFINITION

“The Institute of Supply Management (ISM) Manufacturing Index measures the activity level of purchasing managers in the Manufacturing 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.”

Related posts:

1. US ISM Manufacturing PMI 11/02/09
2. US ISM Manufacturing PMI m/m 12/01/09
3. US ISM Non-Manufacturing PMI 11/04/09
4. US ISM Manufacturing PMI 01/04/10
5. US ISM Non-Manufacturing PMI (Services) 01/06/10
6. US ISM Non-Manufacturing PMI 12/03/09
7. Trading Plan For US ISM Non-Manufacturing PMI 06/03/10
8. Forex Plan For US ISM Manufacturing PMI 07/01/10
9. US ISM Non-Manufacturing PMI 04/05/10
10. US ISM Non-Manufacturing PMI 03/03/2010

Tagged as: economic performance, economy, Expectation, Forecast, Fundamental News, fundamental outlook, institute of supply management, Inventories, Investors, ISM, Jobs, Leading Indicator, Purchasing Manager's Index, purchasing managers, risk appetite, risk aversion, sentiment, Supplier Deliveries, Surveys, US, USA, USD