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Trading The US ISM Manufacturing PMI Release, September 1, 2015

Published 08/31/2015, 03:30 AM
Updated 07/09/2023, 06:31 AM

US ISM Manufacturing PMI is a leading indicator and the first major release for the month and as usual a leading indicator for the Nonfarm Payroll Report on Friday. We will follow the trade plan below for any surprise reading today.

Here´s the forecast:

10:00am NY Time US ISM Manufacturing PMI Forecast 52.6 Previous 52.7
DEVIATION: 2.0 (BUY USD 54.6 / SELL USD 50.6)

Trade Plan

We´ll be looking for around 2.0 points of deviation for this trade. If a 50.6 or worse number is released, we could see some USD weakness, therefore SELL USD. If the opposite is true, or 54.6 figure is released, expect to see stronger USD in the short term, therefore we should BUY USD.

If our tradable releases are reached, there is a good expectation of 50 pips of market movement within the next 60 minutes on USD. I’ll be trading this release using my retracement Trading

I’d recommend to use the Recommended Pairs above as they are based on my CSM and should give you the best combination of currencies to trade in the event of a better/worse news… of course, you can always trade the default pair for this release: EUR/USD.

Outlook Score

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 the opposite.

Definition

The Institute of Supply Management (ISM) Manufacturing Index measures the activity level of purchasing managers in the manufacturing 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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