4:30am (NY Time) UK Services PMI Forecast 53.9 Previous 53.2
ACTION: GBP/USD BUY 56.00 SELL 51.5
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: UK Services PMI came out at 54.1, which was just a tad better than expected. But since the market has been dumbing GBP since the Manufacturing PMI 2 days ago, we are seeing some correction and consolidation of that bearish sentiment. As a result GBP went much stronger in an exaggerated move, which I decided to stay out because the release number doesn’t really support the move. I think it is best to be safe than sorry, given the fact that market sentiment is a tricky thing.