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.
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
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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.
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.
