[flv:http://www.newsprofiteer.com/100509-ukpmi/100509-ukpmi.mp4 480 360]
4:30am (NY Time) UK Service PMI Forecast 54.6 Previous 54.1
ACTION: GBP/USD BUY 56.50 SELL 51.0
Our focus will be on the Services PMI today and we’ll look for a minimum deviation of 2.0 from the expected release figure. If we get at least 56.50 or better, we could see further support in the GBP and a possible LONG trade for GBP/USD and GBP/JPY could be justified. If we get a 51.0 or worse, then we could see GBP retest the lows against both USD and GBP.
As PMI’s are concerned, this leading indicator could set the tone for October for GBP. As traders look for signs of recovery in UK’s economy, Services PMI is probably one of the top indicators for that.
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.”
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