UK Services PMI 09/03/09

4:30am (NY Time) UK Services PMI      Forecast 53.9     Previous 53.2
ACTION: GBP/USD                 BUY 56.00     SELL 51.5

We will watch this report closely as the UK Manufacturing PMI turned out to be a huge disappointment.  If the Services Sector PMI is also missing consensus expectation, we could see another wave of Sterling sell-off and recent supports will be taken out with ease.

If the number comes out worse we’ll SELL GBP/USD; if the number comes out better, then we’ll wait to see market reaction and plan for a SELL GBP/USD from the top, if there is no momentum or follow-through with the market reaction.  At any rate, I’ll be trading this release live and post the results back here…

Definition:

“The Chartered Institute of Purchasing and Supply (CIPS) Services Purchasing Manager’s Index (PMI) measures the activity level of purchasing managers in the services 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.”

[flv:http://www.newsprofiteer.com/090309-ukpmi/090309-ukpmi.mp4 480 360]

UPDATE: UK Services PMI came out at 54.1, which was just a tad better than expected. But since the market has been dumbing GBP since the Manufacturing PMI 2  days ago, we are seeing some correction and consolidation of that bearish sentiment.  As a result GBP went much stronger in an exaggerated move, which I decided to stay out because the release number doesn’t really support the move.  I think it is best to be safe than sorry, given the fact that market sentiment is a tricky thing.

Related posts:

1. UK Services PMI 10/05/09
2. UK Services PMI 11/04/09
3. UK Services PMI 01/06/10
4. UK Services PMI 02/03/10
5. UK Services PMI 03/03/2010
6. Will UK Services PMI Push GBP/USD Above 1.60? [Analysis + Video]
7. Trading Plan For UK Services PMI 07/05/10
8. Trading Plan For UK Services PMI 06/03/10
9. UK Services PMI 04/07/10
10. Forex News Trading UK Services PMI 12/03/10

Tagged as: bearish sentiment, chartered institute of purchasing, chartered institute of purchasing and supply, GBP, GBP/JPY, GBP/USD, institute of purchasing and supply, market sentiment, PMI, Purchasing Manager's Index, purchasing managers, Services PMI, Sterling, UK, UK PMI, USD