UK Services PMI 02/03/10

4:30am (NY Time) UK Services PMI     Forecast 56.6     Previous 56.8
ACTION: GBP/USD                        BUY 58.6         SELL 54.6

We will be focusing on the Services PMI figure today and our minimum deviation is 2.0 from the forecast release figure.  If we get at least 58.6 or better, we could see some demand in the GBP and we will consider BUYING GBP/USD or GBP/JPY pairs.  If we get a 54.7 or worse release, GBP could weaken and we should look to SELL GBP/USD or GBP/JPY pairs.

Because PMI’s are leading indicators and are likely to set the tone for January 2010 for GBP, especially the  Services PMI’s as from UK since UK’s economy is 72% services based; therefore traders look at this release for early direction in UK’s economy.  However, keep in mind that the GBP is under pressure from a stronger USD and general risk aversion sentiment, therefore my bias is towards selling GBP.

Definition:

“The Chartered Institute of Purchasing and Supply (CIPS) Services Purchasing Manager’s Index (PMI) 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.”

Related posts:

1. UK Services PMI 01/06/10
2. UK Services PMI 11/04/09
3. UK Services PMI 03/03/2010
4. Forex News Trading UK Services PMI 12/03/10
5. Forex News Trading Plan UK Services PMI 11/03/10
6. Trading Plan For UK Services PMI 07/05/10
7. Trading Plan For UK Services PMI 06/03/10
8. UK Services PMI 04/07/10
9. Forex News Trading UK Services PMI 01/06/11
10. Forex News Trading Plan For UK Services PMI 10/05/10

Tagged as: chartered institute of purchasing, chartered institute of purchasing and supply, currency, economic performance, Economy Services, GBP, institute of purchasing and supply, Inventories, Leading Indicator, PMI, purchasing manager, Purchasing Manager's Index, purchasing managers, Service PMI, Services PMI, Supplier Deliveries