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UK Markit Services PMI
The most popular British PMIs among others are manufacturing and construction ones, but it does not give you the right to relax. The release may prove to be insidious. Keep an eye on its position relative to the axis of 50 and market demand, both the overall trend and the pair's movement before the release.
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How to trade UK Markit Services PMI
If the data is above the forecast, then GBPUSD will grow and vice versa.
The indicator is leading as it is created based on surveys of key managers of companies, which is conducted by the Institute of Procurement and Supply of Markit. The data above the limit line of 50 suggest optimism, and the data below show pessimism.
Services PMI is important for the market, as the Service sector accounts for 80% of the UK GDP, while Manufacturing is just 10% and Construction 7%. However, we can’t be careful to this indicator, it may be pretty capricious.
Firstly, due to the possible remoteness of the fact/forecast of the indicator from the marginal norm of 50: the farther we are from the limit line, the smaller the market interest in the publication is.
Secondly, the pound is able to burn its fuel by the movement before release, pay attention to the position of the trading pair before publication. Long, directed movements can indicate that there is no fuel in this direction, and even with a good deviation of the fact of the news from its forecast, the movement may turn out to be minimal in this direction.
Thirdly, the market is quite sensitive to its trend in this indicator; accordingly it is worth keeping your hand on the pulse.
Summarizing, we note that the indicator does not always work equally well. For ServicesPMI, the need to choose different triggers for different directions is particularly pronounced, since today it is good to sell, and tomorrow it will already be good to buy.
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