How to trade the US ISM Manufacturing PMI with EUR/USD

The ISM Manufacturing PMI is an important forward-looking indicator and has an impact on the EUR/USD.
The Market Impact Tool shows trading opportunities in both upside and downside surprises on this event.
EUR/USD moved, on average, 16 pips in the 15 minutes after the data release and 50 pips in the next 4 hours.

Yohay Elam FXStreet

Selling EUR/USD Scenario

Tradable Positive Trigger: +1.53 deviation (60.07) [SELL Pair]
Key Support Level: $1.2000

This time, if it comes out at higher than expected with a relative deviation of +1.53 or higher (60.07 or higher in absolute terms), the pair may go down reaching a range of 22 pips in the first 15 minutes and 51 pips in the following 4 hours.

The 3-month low seen of $1.2058 seen on April 27th is the initial level to watch. The round $1.2000 level is eyed by many and serves as a line of support. Further below, the early January trough of $1.1920 awaits.

Buying EUR/USD Scenario

Tradable Negative Trigger: -1.71 deviation (56.53) [BUY Pair]
Fundamental Resistance Level: $1.2155

If it comes out lower than expected at a relative deviation of -1.71 or less (56.53 or lower in absolute terms), the EUR/USD may go up reaching a range of 31 pips in the first 15 minutes and 50 pips in the following 4 hours.

$1.2155 was the March 1st low. Further above, $1.2210 was a swing high in late April and low early in the month. Above, $1.2240 was a high point in late March.

EUR/USD Levels on the Chart

EUR USD April 30 2018 technical daily chart

More data

In the last five releases, the EUR/USD moved, on average, 16 pips in the 15 minutes after the data release and 50 pips in the next 4 hours.

The previous release had a negative surprise of +0.64 in terms of deviation and the EUR/USD reached an 11 pip range in the first 15 minutes and a range of 53 pips 4 hours thereafter.

The ISM Manufacturing PMI for April is expected to tick down from 49.3 to 58.4 points, still showing robust growth in this small yet important sector. The publication is the first hint towards the all-important Non-Farm Payrolls on Friday.

See ISM Manufacturing PMI Preview: USD may gain further especially if the inflation component continues shining

Follow the publication of the figure on the economic calendar. Watch out for the data from the Market Impact tool, projecting the potential price changes according to the deviation. Here is the Market Impact Studies Users Guide.

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

GBP/USD surrenders some gains, back to 1.3420

GBP/USD holds on to moderate gains above 1.3400 the figure on Friday. Optimism surrounding the UK government’s leadership transition and expectations of further BoE tightening support the British Pound, while easing tensions in the Middle East and fading Fed rate-hike expectations weigh on the US Dollar.

EUR/USD turns positive, targets 1.1450

EUR/USD now picks up pace and advances toward the 1.1440 region on Friday, up modestly for the day. With no major economic data due, lingering uncertainty over the US-Iran conflict keeps investors cautious, limiting the pair's upside.

Gold remains offered, still below $4,100

Gold struggles to extend Thursday’s rebound and navigates below the $4,100 mark per troy ounce on Friday. Uncertainty surrounding the Middle East conflict limits the precious metal’s upside, which is also under pressure amid rising US Treasury yields across the curve.

Week ahead – US CPI and Warsh testimony to take centre stage, BoC eyed too

US inflation report and Warsh testimony to headline the week. Dollar to dominate amid slew of other US data and Mideast tensions. Amid fresh Iran escalation, China GDP to shed light on Q2 impact. Bank of Canada not expected to follow RBNZ with rate hike.

Five sessions, one round trip: Why the whipsaw is exactly what Warsh ordered

Markets opened July with a December hike as the base case and spent five trading sessions unlearning and relearning it. A 57K payrolls print bled the tightening bets out of the strip; a re-shut Strait of Hormuz is pushing them back in. Wednesday's minutes from the June Federal Open Market Committee meeting landed mid-round-trip, describing a world that had already stopped existing.

Five sessions, one round trip: Why the whipsaw is exactly what Warsh ordered

Markets opened July with a December hike as the base case and spent five trading sessions unlearning and relearning it. A 57K payrolls print bled the tightening bets out of the strip; a re-shut Strait of Hormuz is pushing them back in. Wednesday's minutes from the June FOMC meeting landed mid-round-trip, describing a world that had already stopped existing.