How to trade the US ISM Manufacturing PMI with EUR/USD
- The ISM Manufacturing PMI is a hint towards the jobs report and impacts currencies.
- 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 (58.72 ) [SELL Pair]
- Key Support Level: 1.1580
This time, if it comes out at higher than expected with a relative deviation of 0.81 or higher(58.72 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.
1.1580 is the meeting point of the 200 Simple Moving Average (SMA) on the four-hour chart and the low point on August 31st. Further down, 1.1530 cushioned the fall on August 23rd. It is followed by 1.1490 seen earlier in the month.
Buying EUR/USD Scenario
- Tradable Negative Trigger: -0.81 deviation (56.66) [BUY Pair]
- Fundamental Resistance Level: 1.1640
If it comes out lower than expected at a relative deviation of -0.81 or less(56.66 or lower in actual terms), the EURUSD may go down reaching a range of 25 pips in the first 15 minutes and 57 pips in the following 4 hours.
1.1640 is the meeting place of the 50 SMA and worked as support last week. 1.1695 worked as resistance late in August. It is followed by the 1.1735-1.1750 area which capped the pair in late August and beforehand throughout July.
EUR/USD Levels on the Chart
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More data
The ISM Manufacturing PMI is a broad survey that gauges the business sentiment in the small yet significant manufacturing sector. The indicator dropped in July, falling short of expectations. A small bounce is on the cards now.
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 negative surprise of -1.11 in terms of relative deviation and the EURUSD reached a 9 pip range in the first 15 minutes and a range of 28 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.
