UK Services Purchasing Manager Index will be released today and depending on the actual figure, we could see the short-term trend of Sterling being affected greatly.
4:30am (NY Time) UK Services PMI Forecast 59.1 Previous 60.5
Deviation: 2.5 (BUY GBP 61.6 / SELL GBP 56.6)
The Services PMI is tradable with a minimum deviation of 2.5 between the forecast and the actual release. If we get at least 61.6 or better, we could see some demand in the GBP and we will consider BUYING GBP against weaker currencies. If we get a 56.6 or lower, GBP could weaken and we should look to SELL GBP against stronger currencies.
Use the after-news trading method. For more information on my methods: https://www.currencynewstrading.com/how-to-get-started-with-news-trading/
I’d recommend to use the Recommended Pairs from above as they are based on my CSM, which should provide the best combination of currency pairs to trade based on better/worse news… of course, you can also trade the default pair: GBPUSD.
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.
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.