4:30am (NY Time) UK Services PMI Forecast 51.9 Previous 51.6
ACTION: GBP/USD BUY 54.00 SELL 49.5
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.
UPDATE: I went long with GBP/USD after the news release only to see the 1.7000 resistance holding this trade, then I decided to take a reversal position as we were approaching top of the range based on technical and risk to reward ratio. Market went against me about 50 pips, but unable to go higher therefore I decided to add more to the position with a tight stop. Finally with both ADP and ISM releases pushing the market to go into risk aversion moves, I was able to get out of this trade with close to 60+ pips of profit.