The Fundamental FOREX Blog

On Tuesday 09-01-09 at 10:00 AM ET the USD ISM Manufacturing PMI and Pending Home Sales MoM reports were released along with the ISM Prices Paid, Pending Home Sales YoY and Construction Spending MoM.

USD ISM Manufacturing PMI and Pending Home Sales MoM  usually have the greatest impact on the currency markets – the ISM Manufacturing PMI being the better.

The USD ISM Manufacturing PMI is released by the Institute of Supply Management and is released monthly, and the Pending Home Sales MoM  is released by the National Association of Realtors and is released monthly.

On Monday, 08-31-09, I wrote a “preview” post of these reports, click here for a review.

Both of these reports came out in favor of the USD, not in conflict, some of the currency pairs I monitor moved as predicted, for a time. Here is what happened.

USD ISM Manufacturing PMI stats:

Previous = 48.9

Forecast = 50.2

Actual = 52.9

This report came out 2.7 more than “forecast” and 4.0 more than last report – good for the USD.

USD Pending Home Sales MoM stats:

Previous = 3.6%

Forecast = 1.7%

Actual = 3.2%

This report came out 1.5 % higher than the “forecast”, but 0.4% lower than the “previous” report – the surprise of the “actual” being higher than the “forecast” was seen as good for the USD as well.

However, it appears that these days the traders may be taking a harder look at the housing market as an indicator of the future of the US economy.

The decline in Pending Home Sales may have had an impact on the currency market after the traders had a chance to look for “revisions” and to assess a way to go investment wise.

I did set up to trade the currency pair EUR/JPY, if the Manufacturing PMI “actual“ came out about 4 more or less than the “forecast”, and the Pending Home Sales MoM  “actual” is not too far off of the “forecast”.

But, I went against my plan when I saw that the Pending Home Sales report came out in the same positive way for the USD as the ISM Manufacturing PMI report, and entered a trade of the currency pair EUR/JPY.

Here are the charts:

a one minute EUR/JPY charts

#1. Entered my “buy” trade after the broker “spread” and “slippage” came back to normal – “scalped” a few PIPS.

#2. I believe that here the traders were waiting for any revisions and were assessing how powerful the homes sales were – as you  can see, the market then moved down.

The cross currency pair GBP/JPY moved in a similar fashion.

a one minute GBP/JPY charts

#1. I believe that here the traders were waiting for any revisions and were assessing how powerful the homes sales were – as you  can see, the market then moved down.

a one minute EUR/USD charts

#1. Here the market appears to be getting some idea about a “revision” or a good way to go – finally, after 8 minutes, the market moves in favor of the USD.

#2. It took about 50 minutes for the market to move down 55 PIPS – good :scalping” possibilities here.

a one minute GBP/USD charts

#1. Here the market appears to be getting some idea about a “revision” or a good way to go – finally, after 6 minutes, the market moves in favor of the USD.
#2. It took about 47 minutes for the market to move down 55 PIPS – good :scalping” possibilities here.

The two other USD involved currency pairs I monitor, USD/CAD and USD/JPY moved against the USD, therefore, were not good opportunities for trading.

The next scheduled release of  this combination of reports will be on Thursday 10-01-09 at 10:00 AM ET.

I will probably post a “preview” a day or two before.
Stay tuned!