How To Trade US ISM Manufacturing PMI 06/01/10

ISM Manufacturing PMI is similar to the UK Manufacturing PMI, which is also a leading indicator and it is usually released at the beginning of the month; traders monitor this release as it may indicate an early change of sentiment of the economy.  Here’s the forecast for this event:

10:00am NY Time  US ISM Manufacturing PMI     Forecast 59.3  Previous 60.4
ACTION:   BUY 62.0      SELL 57.0      USD/JPY

The safe tradable deviation for this release is at 2.5 points in either direction.  In the event we get a better than expected release, this could see a temporary risk appetite rally; however, if the release is negative, below or close to the medium 50 level, we could see some minor consolidation resulting more JPY strength (USD/JPY moving down)… 

PMI usually doesn’t have lasting effects on the market and with a market that is driven by risk sentiment, it certain will not change the long-term trend of currency pairs.  Therefore, I’d be looking for a short-term trade as the effect of this release should not last more the 2 hours.  The plan is to wait for the release, wait for market to make an initial push, and get in on the first retracement back…

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

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