10:00am NY Time US ISM Non-Manufacturing PMI Forecast 51.1 Previous 49.8
ACTION: BUY 53.5 SELL 48.5 USD/JPY
We’ll be looking to trade the ISM Non-Manufacturing PMI, or better known as the Services PMI; it is a leading indicator of the nation’s Services sector, as many investors look at this release for immediate directional preferences on the future of the economy. With the current analyst’s expectation above the 50 level at 51.1, in the event that 53.5 is reached, we could see USD strength returning to the market as JPY weakens across the board; however, if the opposite is true, or 48.5 figure is released, expect to see stronger JPY and possibly risk aversion driven market.
If our tradable releases are reached, there is a good expectation of 50 pips of market movement within the next 120 minutes on both USD/JPY and EUR/USD pairs, among other USD crosses. I’ll be looking to trade USD/JPY on a worse than expected release as USD/JPY may show more of a decline, and sell EUR/USD on a better release as EUR/USD may break the current support areas and breakout to the downside… Of course, it’s important to consider the entire context of the market when trading.
DEFINITION:
“The Institute of Supply Management (ISM) Non-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.”
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