Manufacturing PMI is a leading indicator and usually it is release during early month.  Traders pay attention to this release as strong surprises in this survey could predict the general trend of the market.  Here is the forecast:

4:30am (NY Time) UK Manufacturing PMI  Forecast 57.8   Previous 58.0
ACTION: GBP/USD        BUY 59.8         SELL 56.8

The Manufacturing PMI is forecasted at 57.8. Since PMI’s medium point is at 50, this forecast is considered as a positive release (above the 50 level means expansion in the manufacturing sector).

We are looking for a tradable deviation (or the difference between the forecast figure and the actual release figure)  of 2.0, and because this is a leading indicator and its impact may hint the future trend of other indicators (such as inventory, employment, retail sales, etc..) , market should react to this release with volatility if we get our deviation.  We can expect GBP/USD to move 50 pips within the hour if it is hit. 

With recent risk aversion and the fact that the market has reached a balanced state, a good release should provide plenty of room for GBP to recover.

DEFINITION:

“UK Manufacturing PMI is a survey of purchasing managers in the manufacturing sector on various economic activities, including inventory, employment, orders, etc… A higher than 50 reading means expansion, or a less than 50 reading means contraction.”

Related posts:

1. Forex Trading Plan For UK Manufacturing PMI 07/01/10
2. UK Manufacturing PMI 04/01/10
3. UK Manufacturing PMI 03/01/2010
4. UK Manufacturing PMI 02/01/10
5. UK Manufacturing PMI m/m 12/01/09
6. UK Manufacturing PMI 01/04/10
7. UK Manufacturing PMI 11/02/09
8. Forex Trade Plan For UK Manufacturing PMI 09/01/10
9. Forex Video & Trade Plan For UK Manufacturing PMI 08/02/10
10. UK Manufacturing PMI 09/01/09