4:28am (NY Time) UK Service PMI Forecast 53.5 Previous 54.0
ACTION: GBP/USD BUY 56.5 BUY 51.0
“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 nations 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.”
The February 2nd, 2012 UK services PMI number was released at 56.0; definitely a strong number, so we entered a BUY GBPUSD at 1.5830 shortly after the release. In a few minutes, we closed the trade at 1.5850, with a profit of 20 pips.