Forex Trading Signals by Magister Pips, 2012/02/01
04:28 GBP Manufacturing PMI (50.0 expected, 49.6 prior, 47.6 to 52.5 range)
Top Analysts: 1st 50.6 2nd 49.8
Range Spread: 4.9 vs. 2.5 Jan12 vs. 2.0 Dec11 vs. 2.4 Nov11
This one was a great one to trade but has gone sour since the Autumn. Last month a +2.3 deviation
lead to a 10 pip pop and then a complete reversal in the 2nd minute, going 30 pips below pre-release.
However alot of this has to do with moves into the release based on rumor or a leak. On Jan 2nd
GBPUSD made a low of 1.5466 and by the time of the release was as high as 1.5587, so already 120 pips
higher. Now usually a +2.3 deviation in the past would have been enough to pop this a bit higher,
especially with the 1.5600 handle close by, but 10 pips was all there was and those who had bought
the rumor started taking profit. However after sweeping down Cable did go on to rally more and
by the New York session was at 1.5660s. Cable is alot more volatile than other pairs so a 30-40 pip
whipsaw is always possible without loosing the established trend. In Dec 2011 there was just a +0.6
deviation but in the past a +0.8 was tradable on this. Again Cable sold off about 20 pips went side-
wise but did go on to rally more. November 2011 was a -2.6, this time GBPUSD had come off its highs
the day before of 1.6165 and was at 1.5990 and initiall shot to 1.5960, it did jump back up to pre-
release 3 minutes after the release but then did continue the downtrend. So given this we will
widen out triggers to +/-2.5 and of course watch the trend into the release and widen out the side
in the direction of the trend and tighten the deviation that is counter-trend. Another option is
to follow the general trend after a reversal after the release, as we have seen this occuring.
-If it comes out at +48.5 or more, GBP/USD should rally 40-70 pips.
-If it comes out at +45.8 or less, GBP/USD should drop 40-70 pips.
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