Canada – Richard Ivey School of Business Purchasing Managers’ Index (PMI)
GMT 2:00 p.m., the Richard Ivey School of Business will release its purchasing managers’ index (PMI) for Canada, which measures the level of a diffusion index. This index is created from a survey of 175 purchasing managers in Canada.
The purchasing managers usually have the most recent perspective into their company’s stance regarding the economy. This is primarily because during an optimistic business climate, companies spend more and vice-versa. Hence, the Ivey PMI data are considered by binary options investors to be a leading indicator of the Canadian economy.
Last month, the Ivey PMI reading came out at 62.3 and this month the forecast is set at slightly lower at 56.2.
United States – ISM Manufacturing Purchasing Managers’ Index
At the same time, the US based Institute for Supply Management will release its purchasing managers’ index (PMI), which measures the level of a diffusion index. This index is based on a survey of around 400 purchasing managers. It asks the respondents to rate the relative level of the business environment in the country on the issues of employment, price level, production situation, new orders, existing inventories, etc.
Since the purchasing managers usually have the latest insight about their respective businesses, the collective perception of the purchasing managers in the country acts as a leading indicator of the overall Canadian economy. Hence, binary options traders consider the ISM’s PMI figure to be a vital fundamental data.
In June, the ISM Manufacturing Purchasing Managers’ Index reading came out at 55.7, and this month the forecast is set at a higher reading, 56.5.
Trade Recommendation for the USD/CAD
After forming a bullish pin bar on June 18, the USD/CAD price was trending upwards for the last two weeks and penetrated above the psychologically important resistance zone around the 1.2375 level.
On July 1, the USD/CAD daily candlestick also closed above another resistance level around 1.2550. Since then, the pair formed a bearish pin bar, but the price has failed to penetrate the low of this pin bar. Hence, it has no formed an Inside Bar (IB) as well.
As there are two important fundamental data releases are scheduled during the afternoon, any significant deviation from the market’s expectation in these indicators would likely push the USD/CAD price either way.
If the USD/CAD price closes above the high of the Inside Bar, at 1.2633, traders should place a CALL order with their binary options brokers. On the other hand, if the USD/CAD price closes below the low of the inside bar, at 1.2537, they should consider placing a PUT order instead.
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