US ISM Manufacturing PMI November 1, 2012 Currency Trading

ISM or Institute for Supply Management is releasing its PMI (Purchasing Manager Index) today. As a leading indicator, traders generally pay attention to this report for hints of economic trend.
Here´s the forecast:

10:00am NY Time US ISM Manufacturing PMI Forecast 51.0 Previous 51.5
DEVIATION: 2.0 (BUY USD 53.0 / SELL USD 49.0)

Trade Plan
We´ll be looking for around 2.0 points of deviation for this trade. If a 49.0 or worse number is released, we could see some USD weakness, thererefore SELL USD. If the opposite is true, or 53.0 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 Method.

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: EURUSD.

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.