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EUR/USD binary signal - U.S. ISM Manufacturing PMI - 01 June 2017

Signal details
Entry Price: 
1.1236
Close Price: 
1.1214
Direction: 
Low
Expiry Time: 
20:00 GMT
Result: 
ITM
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The Institute of Supply Management (ISM) will be releasing the manufacturing Purchase managers' index (PMI) today at 1400 GMT. Economists polled are expecting the manufacturing PMI to fall to 54.7, down from April's 54.8. This suggests a third consecutive month of decline in manufacturing activity.

However, with the index still above 50, the ISM data suggests that activity expanded, albeit at a slower pace after initially rising to 57.7 in February this year. While the forecasts are to the downside, other preliminary data suggests that there could be a surprise with a potential beat on the estimates.

Firstly, the most recent Beige book report from the U.S. Federal Reserve showed that manufacturing activity picked up pace regionally. It also leads to higher wage growth due to the labor market competition. The implications of the Beige book suggest that both manufacturing activity and average wages could have increased in the month of May.

A few weeks ago, the regional manufacturing surveys such as the NY Fed's empire state manufacturing index and the Philly Fed manufacturing index painted a mixed picture. While one regional manufacturing activity fell, the other rose. This slightly complicates the expectations for today, although the bias is to the upside.

Besides the ISM's report on manufacturing activity, Markit will also be releasing the final manufacturing PMI. Expectations are for no change as the index is expected to remain at 52.5, same as the month before.

Given the above, today's binary trading signal recommendation is to purchase daily PUT options in EURUSD. Following yesterday's continued push to the upside, the momentum is looking a tad weaker which suggests some downside in prices.

Therefore, look to purchase daily PUT options in EURUSD at 1.1236 for a 20:00 GMT expiry time.

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. He has no business nor personal relationships with any mentioned government entities or stocks. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion.