UK Services PMI 11/04/09

4:30am (NY Time)   UK Service PMI      Forecast 55.4     Previous 55.3
ACTION: GBP/USD                 SELL 53.40     BUY 57.40

We’ll be trading the Services PMI figure today and we’ll look for a minimum surprise factor of 2.0 from the forecast release figure.  If we get at least 57.40 or better, we could see support in the GBP and a possible LONG trade for GBP/USD and GBP/JPY could be justified.  If we get a 54.4 or worse release, GBP could weaken significantly ahead of the BOE rate decision on Thursday, thus exaggerating the effect of this release.

As PMI’s are leading indicators that can set the tone for November for GBP, especially the UK PMI’s as UK’s economy is 72% services based; therefore 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.”

Related posts:

1. UK Services PMI 01/06/10
2. UK Services PMI 02/03/10
3. UK Services PMI 12/03/09
4. UK Services PMI 03/03/2010
5. UK Services PMI 10/05/09
6. UK Services PMI 04/07/10
7. Trading Plan For UK Services PMI 06/03/10
8. Trading Plan For UK Services PMI 07/05/10
9. Forex News Trading UK Services PMI 12/03/10
10. Forex News Trading Plan UK Services PMI 11/03/10

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