4:30am (NY Time) UK Manufacturing PMI Forecast 51.5 Previous 50.8
ACTION: GBP/USD BUY 53.5 SELL 49.0
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. If this number stays above 50, there shouldn’t be much market reaction; however, if this number falls below 50, GBP could be under some selling pressure as the confidence level for Sterling has been low among investors.
If our BUY/SELL numbers are hit, we can expect GBP/USD to move 50 pips within the hour. If we do not get our tradable number, there would be NO trade.
We are looking for a deviation of 2.0, but in this case we are looking for an above 53.5 release and below 49.0, this is due to the recent market condition and risk sentiment. If the number comes out below 50, which shows contraction after just one month of expansion release last month, and it was the only positive release in over a year, it could imply that maybe UK’s economy is still far too unstable.
Remember that this is a leading indicator, which may affect the upcoming trend of this currency for the weeks to come.
[flv:http://www.newsprofiteer.com/090109-ukmanufacturing/090109-ukmanufacturing.mp4 480 360]
UPDATE: Market quickly moved on the worse than expected release; I waited for a decent retracement from the initial drop and picked up over 42 pips of profit in a relative short amount of time. Overall it was a great trade, great analysis, and whoever followed me in my room made good money.
Related posts:
- UK Manufacturing PMI m/m 12/01/09
- UK Manufacturing PMI 11/02/09
- UK Manufacturing PMI 01/04/10
- UK Manufacturing PMI 04/01/10
- UK Manufacturing PMI 02/01/10
- Strategy For UK Manufacturing PMI 06/01/10
- UK Manufacturing PMI 03/01/2010
- Forex Trading Plan For UK Manufacturing PMI 07/01/10
- Forex Video & Trade Plan For UK Manufacturing PMI 08/02/10
- Forex Trade Plan For UK Manufacturing PMI 09/01/10
{ 1 comment… read it below or add one }
Hi Henry,
I traded this one selling USD/GBP I waited for a retracement (just like you have always said) and I got in 3min after announcement at 1.6265 for a target of 1.6218 (47pips). I chickened out (again) and took profit at 1.6252 (13 pips). If I had waited another hour I would have got my target of 47 pips, bugger oh well.
P/s When I was about to close my trade it was up 24 pips then at that moment on the trigger it bounced back to the 13 pip profit, DAMN!
Thanks for you tuition Henry I’m slowly starting to become more patient with my trades and trying to become more certain before jumping into a trade.
Devin.