How to trade the US ISM Manufacturing PMI with EUR/USD
- The ISM Manufacturing PMI provides guidance towards the NFP and moves markets.
- The Market Impact Tool shows trading opportunities in both upside and downside surprises on this event.
- The EURUSD moved, on average, 13 pips in the 15 minutes after the data release and 38 pips in the following 4 hours
Selling EUR/USD Scenario
- Tradable Positive Trigger: +0.81 deviation (60.69 ) [SELL Pair]
- Key Support Level: 1.1575
This time, if it comes out at higher than expected with a relative deviation of 0.81 or higher(60.69 or higher in actual terms), the pair may go down reaching a range of 29 pips in the first 15 minutes and 56 pips in the following 4 hours.
1.1665 separated ranges in late July. Lower, 1.1620 was a trough in late July. Lower, 1.1575 was a low point in the middle of the month. The 2018 low of 1.1508 is next.
Buying EUR/USD Scenario
- Tradable Negative Trigger: -1.71 deviation (56.53) [BUY Pair]
- Fundamental Resistance Level: 1.1750
If it comes out lower than expected at a relative deviation of -0.73 or less(58.99 or lower in actual terms), the EURUSD may go up reaching a range of 29 pips in the first 15 minutes and 64 pips in the following 4 hours.
1.1750 is a double top and also was a high point in mid-July. 1.1795 is the peak during July. Higher above we find 1.1850, the peak that was seen in mid-June.
EUR/USD Levels on the Chart
-636606734128568473.png&w=1536&q=95)
More data
The ISM Manufacturing PMI is a forward-looking indicator on the small but important sector. Apart from guidance on the broader economy, the gauge also gives a hint for the Non-Farm Payrolls. After a strong number in June, a small slide is on the cards for July.
ADP NFP and ISM Manufacturing PMI preview: Defensive forecasts leave room for surprises
In the last five releases, the EURUSD moved, on average, 13 pips in the 15 minutes after the data release and 38 pips in the following 4 hours. The previous release had a positive surprise of 1.641 in terms of relative deviation and the EURUSD reached a 9 pip range in the first 15 minutes and a range of 55 pips 4 hours thereafter.
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.
