US ISM Manufacturing PMI 03/01/2010

10:00am NY Time  US ISM Manufacturing PMI     Forecast 57.7  Previous 58.4
ACTION:   BUY 60.0      SELL 55.0      USD/JPY

We’ll be looking for a possibility to trade the ISM Manufacturing PMI today 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 minor consolidation or even a very tightly traded market…  Since this is a leading indicator, investors pay more attention to this release for signs of market direction this month and possibly trend changes…  And with the NFP scheduled on Friday, this release might have more impact than usual should we get a huge surprise.

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 as these 2 pairs should fall back to its long term trends from last week’s minor consolidation.

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 01/04/10
3. US ISM Non-Manufacturing PMI 11/04/09
4. US ISM Manufacturing PMI m/m 12/01/09
5. US ISM Non-Manufacturing PMI (Services) 01/06/10
6. US ISM Non-Manufacturing PMI 12/03/09
7. US ISM Non-Manufacturing PMI 02/03/10
8. US ISM Non-Manufacturing PMI 09/03/09
9. US ISM Non-Manufacturing PMI 10/05/09
10. US ISM Manufacturing PMI 09/01/09