10:00am (NY Time) CA IVEY PMI Forecast 64.0 Previous 62.7
ACTION: USD/CAD BUY 60.0 SELL 67.0
We’ll focus on the IVEY PMI (IVEY Purchasing Manager’s Index) from Canadatoday, it is the equivalent of both ISM PMI’s out of US where purchasing managers of all sectors of the economy participate in this survey. And as with PMIs, they are all considered as leading indicators with the medium point at 50, therefore a reading of above 50 would be considered as expansion in the economy whereas a reading below 50 would be considered as contraction in the economy.
Our tradable surprise factor is 3.0 as it has provided a good historical track record, but because we are so much above the medium point of 50, we need to get either a 67.0 or 60.0 (based on a forecast figure of 64.0) for us to take a trade. IVEY PMI is usually tradable before the Canadian Employment Changes and not after when scheduled at the same day. It is funny that IVEY PMI is a leading indicator and Employment Change is a lagging indicator, and both are actually figures of different both, but the general market seems to ignore that and with this Friday’s Employment Changes release, this PMI may fuel some fundamental sentiment in the CAD currency if we get a strong/weak employment component out of this release.
With USD/CAD lingering at strong resistance level just below the 1.0700, this release could help USD/CAD breakout current range or bounce back down to the 1.0150 level again. The plan is simple, SELL USD/CAD if we get 67 or better, or BUY USD/CAD if we get 60 or less… preferably after a decent retracement.
DEFINITION
“The Ivey Purchasing Manager’s Index (PMI) measures the activity level of purchasing managers from all sectors of the economy, 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:
- Canada IVEY PMI 10/06/09
- Forex News Trading Canada IVEY PMI 01/06/11
- Forex News Trading For Canada IVEY PMI 10/06/10
- Canada IVEY PMI 02/04/10
- AU Canada IVEY PMI 04/07/10
- Canada IVEY PMI 03/04/2010
- Canada IVEY PMI m/m 01/07/10
- Forex News Trading CA IVEY PMI 05/05/11
- Forex News Analysis For Canada IVEY PMI 10/06/11
- Forex News Trading CA IVEY PMI 04/06/11
{ 5 comments… read them below or add one }
Henry,
The IVEY PMI came out bad so why the USD/CAD is going down instead of going up?
David: See my previous reply.
… sorry i meant the 58.9 figure …. not 57
Market basically ignored fundamental from Canada. This basically means sentiment of risk appetite is driving the market as EUR/USD made another attempt above 1.2600. USD is generally weaker. If you look at USD/CAD, it didnt crash until later on, compared to other currencies… but nevertheless, market ignored IVEY.
Geez Henry, not so good this time … I made a loss, any reason why it went the other direction?
The 57 figure was way below 60 and yet the usd/cad went down.