US ISM Non-Manufacturing PMI is usually very market moving and considering that over 70% of U.S. labor force is services related, today’s release should most definitely move the market; with Nonfarm Payroll scheduled on Friday, market will pay even more attention to this release, along with the ADP NFP report on Wednesday.
10:00 am NY Time US ISM Non-Manufacturing. PMI Forecast 59.2 Previous 60.1
Deviation: 2.5 (BUY USD 61.7 / SELL USD 56.7)
U.S. ISM Non-Manufacturing PMI is better known as the U.S. Services PMI; the current expectation is above the 50 level at 59.2. This figure indicates an expansion in the services sector where 50 is the medium point for the PMI. We´ll be using a deviation of around 2.5 points in order to trade this release. In the event that 61.7 is reached, we could see some USD strength and we should focus on trading against weaker currencies. If the opposite is true and a figure of 56.7 is released, expect to see weaker USD and we should trade with stronger currencies as a below 50 entry shows a contraction in the Service sector…
If our tradable releases are reached, there is a good expectation that the market will move 50 pips within the next 120 minutes.
I´ll be using my retracement trading method for this release, for more information on my news trading methods, please read: http://www.currencynewstrading.com/how-to-get-started-with-news-trading/
I’d recommend using the Recommended Pairs from above as they are based on my CSM, which should provide the best combination of currency pairs to trade based on better/worse news… of course, you can also trade the default pair: EURUSD.
Outlook score is derived from market sentiment, focus, and economic indicators for the currency. It represents the long-term trend of the currency and its market perception. In short, a strong Outlook Score means more long-term demand for the currency, and a weak Outlook Score is an opposite.
The Institute for Supply Management (ISM) Non-Manufacturing Index 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 of 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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Source: New feed 2