10:00am (NY Time) US ISM Manufacturing PMI Forecast 46.4 Previous 44.8
ACTION: USD/JPY BUY 49.0 SELL 44.0
This is one of the first important indicator for this week and may have a longer effect for the rest of the month. If the number is lower, we’ll look to BUY GBP/USD, EUR/USD or SELL USD/JPY, USD/CHF, USD/CAD. If the number is significantly higher, we’ll look to SELL GBP/USD, EUR/USD or BUY USD/JPY, USD/CHF, USD/CAD. But remember, take a couple of seconds to see the market reaction if the number is lower. We could very well see broad bullish sentiment for the U.S. Dollar and ignore the worse number.
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.
UPDATE: We didn’t get our expected deviation of 49, but it was darn close. Market reacted almost immediately with risk appetite sentiment as all JPY crosses went up and made new highs. However, I decided to stay out of the market especially when the market is making new highs. It was a no trade based on News Trading, but then I decided to take a trade based on other factors. Watch my video once it is available for more information.
Related posts:
- US ISM Manufacturing PMI 11/02/09
- US ISM Manufacturing PMI m/m 12/01/09
- US ISM Manufacturing PMI 09/01/09
- US ISM Manufacturing PMI 01/04/10
- US ISM Non-Manufacturing PMI 11/04/09
- US ISM Manufacturing PMI 10/01/09
- US ISM Non-Manufacturing PMI 10/05/09
- US ISM Manufacturing PMI Forex Trading Plan 10/01/10
- US ISM Non-Manufacturing PMI 08/05/09
- Forex News Trading Strategy For US ISM Manufacturing PMI 12/01/10
{ 4 comments… read them below or add one }
Hi
again good news for USD but the eur/usd pair went UP??!!and usd/chf down??may you explain . I’ve got mixed.
may thanks and waiting for your answer
As US news affect the entire currency market, a better than expected release generally push the risk appetite sentiment up, and risk appetite sentiment generally pushes down USD as USD is considered as safe haven currency. However, this may change for the NFP and ADP report this week… Just remember, good news makes market happy, and market happy makes high risk currencies happy, and if high risk currencies are happy then low risk currencies get under pressure. And what are high riskers? GBP, EUR, AUD, NZD, CAD; and what are low risker? JPY, USD.
Hmmm.
Bought UJ and ran into strong resistance at 95.31. Exited +6 pips on a multi-hour trade.
Missed on the EU move. Still learning. Always learning.
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