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German Composite PMI

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JamesThatcher

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This PMI is important to the market as its a forward-looking indicator that helps predict the direction of Europes largest economy!

Check out how well EURUSD moved last month, on very small conflicting deviations..
.
We must concentrate on the Manufacturing line, as this is the most important part of the German economy!

Trade Plan..
German Manufacturing PMI - Primary triggers of 2/3/4
German Composite PMI -  must deviate by 1.0+-
German Services PMI - must deviate by 1.0+-


Linkback: https://www.forex.zone/fundamental/12/german-composite-pmi/3252/
#1 - February 19, 2021, 07:49:39 AM
« Last Edit: February 24, 2021, 01:02:09 PM by Admin »

JamesThatcher

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Country of release - Germany

What does the data mean to the market? Purchasing managers indexes (PMI?s) are a survey taken from the top business purchasing managers in a country's largest companies. They give a forward-looking indicator of how a section of a countries economy is looking. A higher PMI score indicates growth and expansion, more output which is great for the economy, jobs overall market, and increased revenues. Therefore a higher number than forecast is positive for the EUR, and I would BUY the EUR  A lower than expected forecast figure has the reverse effect. And I would SELL the EUR.

The entire formula on how PMI is calculated can be found here:- https://en.wikipedia.org/wiki/Purchasing_Managers'_Index Anything above the magic number of 50 means growth; anything below 50 means a decline in output. 


Historic Deviations and Their Outcomes


Feb 2021 There were huge deviations in manufacturing, but with the service?s data, the deviations conflicted! Likely to be linked to Covid19 and Brexit, Germany's services sector has pushed more into the spotlight than before. Once a minor, unimportant line of data is now crucial! So we saw minimal movement; we wouldn?t have even covered the spreads.
See charts → https://calendar.galaxysoftwareinc.com/#/calendar;i=28848;t=2021-02-19;r=M1
 
Jan 2021, A significant conflict on services corrupted the move. Providing zero opportunity for a trade.  
See charts →
https://calendar.galaxysoftwareinc.com/#/calendar;i=28848;t=2021-02-19;r=M1
 
Today?s Forecasts
Manufacturing PMI= 60.5
Services PMI = 46.5
Composite = PMI 51.6
 
Today?s Trade Plan
Although this news is very relevant to the market and forward-looking, the EU?s failure to vaccinate their population has meant that at the time of writing this plan, Germany and France look to be locking down once more to try to stop the spread of Covid19. Therefore how can the market be bullish on any positive data collected before the current news of another potential lockdown, Any optimism the data shows must indeed be sidelined. Instead, I will only trade negative data. If things were bad before the lockdown announcements, now they are only going to be worse. Therefore look for deviations of 2.0 on all 3 lines in the same direction to create a tradeable move. 
 
Tradable Pairs - EURUSD and EURJPY


Good Look 
James Thatcher



#2 - March 23, 2021, 09:33:42 PM
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