Forum on trading, automated trading systems and testing trading strategies
Sergey Golubev, 2014.01.17 15:52
How Forex News Traders Use ISM Numbers (adapted from dailyfx article)
NZDUSD M5 : 17 pips prrice movement by USD ISM Manufacturing PMI :
What is ISM?
A country’s economy is as strong as its supply chain. The Institute for
Supply Management (ISM) measures the economic activity from both the
manufacturing side as well as the service side. Formed in 1915, ISM is
the first management institute in the world with over 40,000 members in
90 countries. Since it can draw from information gathered from the
surveying its large membership of purchasing managers, the ISM economic
news releases are carefully watched by Forex traders around the world as
a reliable guide to economic activity.
ISM publishes three surveys; manufacturing, construction, and services.
Published on the first business day of the month, the ISM Purchasing
Managers Index (PMI) is compiled from surveys of 400 manufacturing
purchasing managers. These purchasing managers from different sectors
represent five different fields; inventories and employment, speed of
supplier deliveries, production level, and new orders from customers.
XAUUSD M5 : 3345 pips price movement by USD - ISM Non-Manufacturing PMI news event :
In addition, ISM construction PMI is released on the second business day
of the month, followed by services on the third business day. Forex
traders will look to these releases to determine the risks at any given
time in the market.
EURUSD M5 : 37 pips price movement by USD - ISM Non-Manufacturing PMI news event :
Forex Market Impact
The Manufacturing and Non-manufacturing PMI’s are big market movers.
When these reports come out at 10:30 AM ET, currencies can become very
volatile. Since these economic releases are based on the previous
month’s historical data gathered directly from industry professionals,
Forex traders can determine if the US economy is expanding or
Forex traders will compare the previous month’s number with the
forecasted number that economists have published. If the released PMI
number is better than the previous number and higher than the forecasted
number, the US dollar tends to rally. This is where fundamental and
technical analysis comes together to create a trade setup.
AUDUSD M5 : 21 pips price movement by USD - ISM Non-Manufacturing PMI news event :
In the example above, notice how the better than expected PMI number
triggered a US dollar rally against the Euro. As seen in the chart above
of the EURUSD, the ISM Non-Manufacturing was not only above 50 but at
55.4, beat the forecasts calling for a drop from 54.4 to 54.0.
When an economic release beats expectations, like in the example above,
sharp fast moves can result. In this case, EURUSD dropped 22 pips in 15
minutes. Traders often choose the Euro as the “anti-dollar” to take
advantage of capital flows between two of the largest economies.
The Euro zone has a large liquid capital markets which can absorb the
huge waves of capital seeking refuge from the U.S. So a weak US ISM
Non-Manufacturing number usually leads to a dollar sell-off and a rise
in the Euro. Another scenario is when the number released is in line
with forecasts and/or unchanged from the previous month, then the US
dollar may not react at all to the number.
AUDUSD M5 : 32 pips price movement by USD - ISM Manufacturing PMI :
Overall, an ISM PMI number above 50 indicates that the economy is
expanding and is healthy. However, a number below 50 indicates that the
economy is weak and contracting. This number is so important that if the
PMI is below 50 for two consecutive months, an economy is considered in
PMI’s are also compiled for Euro zone countries by the Markit Group
while US regional and national PMIs are compiled by ISM. As you can see,
traders have good reason to pay special attention to the important
releases from the Institute of Supply Management.
How to Start with MT5, a summary !
Alain Verleyen, 2013.03.15 16:12
How to start with MT5 platform : summary.
As our topic about "How to start with Metatrader 5" is going to be huge, here you find a summary, with main links.
Work in progress, stay tuned :-)
Sergey Golubev, 2015.06.22 10:56
Societe Generale: Greece is not the biggest EUR/USD driver (based on efxnews article)
"You could be forgiven for thinking that the biggest driver of
the EUR/USD rate is not Greek debt talks, but the pricing of the
December 2016 Fed Funds futures contract. This closed on Friday at 1.02%, the lowest level since mid-May."
"Neither is high profile enough to change market thinking about Fed policy, which prices a 1% rise in rates over 18 months. All of which just suggests we will get a stronger dollar once a
faster pace of fed rate hikes is priced in, but this needs a catalyst
that today’s data won’t provide. In the meantime, we watch the
combination of (super-low) Fed pricing and hope of a Greek deal boost
risk sentiment and undermine the dollar for the start of the week."
Sergey Golubev, 2015.06.22 11:53
Deutsche Bank - Durable Goods Orders and PCE are the next big data (based on efxnews article)
EUR/USD continues to grind higher as Greece continues to dominate the headlines.
"The main focus was the June Fed meeting where early year expectations
of a hike this month now feel a long time ago. There was speculation
that Yellen shifted her 2015 dot lower, although as our US economist
noted it is hard to tell. With the Fed still in data-dependent mode,
more convincing evidence of a Q2 growth pick-up is needed. This week’s
May durable goods orders and PCE are the next big data," DB argues.
Sergey Golubev, 2015.06.22 19:00
EUR/USD Double Top or About to Breakout? (based on dailyfx article)
'EUR/USD recorded a new month-to-date high late last weekand actually
came within a few pips of testing the quarter-to-date closing high at
1.1442 before stalling out. Is the euro
undergoing a double top backtest before turning lower or is it about to
break out and extend the multi-month advance? The next 24-28 hours
should prove key in determining which path the euro will take as
near-term cyclical analysis suggests we have reached an inflection point
of sorts. If the broader downtrend is going to re-assert itself here
then EUR/USD shouldn’t really rally past last week’s 1.1435 high.
Traction above this level would be a strong sign that multi-month
correction in the single currency is nowhere near finished. A failure,
on the other hand, at or around current levels followed by a break of
median-line channel support at 1.1230 over the next few sessions would
confirm a change in behavior and re-focus attention lower in the single
Sergey Golubev, 2015.06.23 09:26
Video: Euro Tempts with Greece Progress, Equities Rally Bolsters Risk (based on dailyfx article)
Sergey Golubev, 2015.06.23 11:25
Trading News Events: U.S. Durable Goods Orders (based on dailyfx article)
Another 1.0% contract in demand U.S. Durable Goods may dampen the appeal
of the greenback and generate a near-term advance in EUR/USD as ongoing
slack in the real economy raises the risk for a further delay in the
Why Is This Event Important:
Fears of a slower recovery may encourage a growing number of Fed
officials to adopt a more dovish tone for monetary policy, and we may
see the Federal Open Market Committee (FOMC) retain the zero-interest
rate policy (ZIRP) throughout 2015 in order to mitigate the downside
risks for growth and inflation.
On the other hand, discounted prices paired with the pickup in
private-sector wages may foster greater demand for U.S. Durable Goods,
and a positive development may keep the Fed on course to raise the
benchmark interest rate later this year as the central bank remains
confident in achieving its dual mandate for full-employment and price
How To Trade This Event Risk
Bearish USD Trade: Orders Contract Another 1.0% or Greater
MetaTrader Trading Platform Screenshots
USDJPY, M5, 2015.06.23
MetaQuotes Software Corp., MetaTrader 5
USDJPY M5: 36 pips price movement by USD - Durable Goods Orders news event
Sergey Golubev, 2015.06.23 20:34
Barclays - Trading Setups For EUR/USD, USD/JPY, GBP/USD and AUD/USD (based on efxnews article)
EUR/USD: A succession of “doji” topping candles adds
to our bearish conviction. We are looking for a move lower towards the
1.1050 area after reaching our initial downside targets near 1.1150.
Beyond there we look for a move towards 1.0815 and then the 1.0460
year-to-date lows. The 1.1470 highs provide selling interest.
USD/JPY: Monday’s engulfing candle endorses our
bullish view. We are looking for a move higher towards initial targets
near 124.45 and then 125.85. Further out we are targeting the 132.20
GBP/USD: We have turned neutral in the short term.
Monday’s low close confirms the prior topping candle and signals a move
lower in range as investors lock in profits from the June rally. Risk is
seen towards 1.5640, possibly 1.5550, before a base can form. Overall
we are bullish towards 1.6000 and then targets near 1.6200.
AUD/USD: We are bearish against the 0.7850 recent
highs and look for a move lower towards targets near 0.7600 and then the
0.7530 year-to-date lows. Further out, we are targeting the 0.7100
Sergey Golubev, 2015.06.24 12:29
Trading News Events: U.S. Gross Domestic Product (GDP) (based on dailyfx article)
Why Is This Event Important:
Even though the Fed remains on course to raise the benchmark interest
rate in 2015, signs of a slower recovery raises the risk for a further
delay in the normalization cycle as the central bank remains in no rush
to switch gears.
However, slowing outputs along with the ongoing weakness in business
investments may continue to drag on the real economy, and a dismal print
may drag on the greenback as it dampens the likelihood for the Fed
liftoff at the September 17 meeting.
How To Trade This Event Risk
Bullish USD Trade: U.S. Economy Contracts 0.2% or Less
USDJPY, M5, 2015.06.24
USDJPY M5: 19 pips price movement by USD - GDP news event
AUDJPY, M5, 2015.06.24
AUDJPY M5: 19 pips price movement by USD - GDP news event
Sergey Golubev, 2015.06.25 09:22
Greece Stand Off Enters Final Days, Seek More Productive Options Than Euro (based on dailyfx article)
When Greece and its creditors choose either default or debt forgiveness, the response from the Euro can be dramatic. Trading potential on such a provocative fundamental development will be substantial and certainly something we plan for ahead of time. That said, in the messy period of negotiating preceding this clear outcome, the currency is going to be erratic and difficult trading. Patience is warranted, but that doesn't mean we have to sit staring with bated breath. There are developing technical and fundamental themes in other corners of the market.
Please enable the necessary setting in your browser, otherwise you will not be able to log in.