A1 Trading Company

November 20, 2023

Trading Into PMI Data on EUR, GBP and USD

Frank Cabibi

This week is a big PMI week for Europe, UK and US. Additional inflationary metrics will add to the overall sentiment of these countries' monetary policies going forward. Here are some setups for the coming week on these currencies.

EdgeFinder Analysis

GBPCAD is now a +7 on the EdgeFinder as we wait for CPI news in Canada tomorrow and PMI data in the UK on Thursday. The score flipped happened earlier this month as the bearish reading jumped from a -3 to a +2 in a matter of days.

COT and retail are in agreement for the latest positional reports which were short bias on the pound. Canada CPI is expected to come in higher on a month-to-month basis while GBP's is forecasted higher for the month. Lower PMI would suggest weakness in the pound, but higher CPI in Canada could act as a balance between the potential pound weakness.

The SPX500 and US indices are no longer strong buys on the EdgeFinder due to the labor market score holding the overall score under +7. Right now, the index is at +4, seeing little activity on the COT side who have marginally increased long positions.

Retail is majority short the S&P which adds to the promising upside on the index. Price has broken above a strong resistance level and is now heading towards its next target around $4541. This highs from August are a long term target which is at the $4612 level.

EURCAD is no longer a strong bullish reading on the EdgeFinder, but there is some potential for further upside. The economy, labor market, and interest rate scores are at a stalemate at 0. If we take a look at sentiment and seasonality, we'll see something different.

COT is buying up EUR, and retail is majority short this pair. Next, month is also expected to be a wild ride for the pair as it is historically the most bullish month of the year for the past 10 years. EUR PMI is expected to come in hotter than last month which would add to the bullishness of the euro and this pair.

Retail Spotlight

Retail positioning is strongly bearish against the indices and CHF. Top three most bought are CADCHF, GBPCHF and AUDCHF. The three most shorted pairs are GER30, CHFJPY and EURCAD.

Smart Money Spotlight

Smart money decreased a good bit of their positions on indices in last week's report. This seems normal after a steep run to the upside on the stock market, but the bullish sentiment is likely not over. Metals saw an increase in short positions for the week indicating the same idea in the stock markets. EUR is the second-most bought asset on the weekly basis, and CAD was marginally more bullish. The positional bias chart shows the most bullish positioning on the EURCAD pair since June.

Fundamental Spotlight

US PMI data suggests strength in the economy as purchasing managers hit 50 last month which means expansionary sentiment overall. Manufacturing PMI is expected to be 49.9 this Friday, however. and Services is expected to drop from 50.6 to 50.4.

A1 Edgefinder

All-In-One Fundamental Dashboard!
Simplify your fundamental analysis with our all-in-one fundamental dashboard! 
Discount code: READER

Learn more

My Crazy Trade On Gold: Up $8000

Hey Traders! This week has been wild for Gold! Thanks to insights from the EdgeFinder, I've been in a trade on XAUUSD since May 3rd. Initially, I jumped in due to weak jobs and PMI data, sticky inflation, and solid support/market structure. Here’s a quick look at my gold trade: Entry Recap: On May 13th, […]

Read More
Is Gold the Buy of 2024?

Rates move lower after the BoE announced their latest monetary policy report to keep rates unchanged at 5.25%. Unemployment came in higher this morning with the 30-year bond auction coming up Thursday afternoon. In the midst of a slow news week in the US, gold is sitting at a very favorable position according to the […]

Read More
Yields Fall Ahead of Earnings

More earnings reports come out this week is causing an inflow of buyers in the equities market while yields begin the week on a decline. Last week's Fed meeting showed up as "less hawkish" than investors expected causing risk appetite to increase at the start of the summer months. EdgeFinder Analysis As we come off […]

Read More
DISCLAIMER: All comments made by TraderNick’s Forex Group, LLC are for educational and informational purposes only. All comments should not be construed as investment advice regarding the purchase or sale of any securities or financial instrument of any kind. Please consult with your financial adviser before making an investment decision regarding any securities or financial instruments mentioned by TraderNick’s Forex Group, LLC. TraderNick’s Forex Group, LLC assumes no responsibility for your trading and investment results. All information on any of the platforms utilized by TraderNick’s Forex Group, LLC was obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. TraderNick’s Forex Group, LLC, its employees, representatives, and affiliated individuals may have a position or effect transactions in the securities and financial instruments herein and or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. Trading of any type involves very high risk and may not be suitable for all investors. TraderNick’s Forex Group, LLC, its subsidiaries and all affiliated individuals assume no responsibility for your trading and investment result. Read our full disclaimer here
Home
Edgefinder
Signals
There is a significant degree of risk involved in trading securities. With respect to foreign exchange trading, there is considerable risk exposure, including but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or currency pair. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you can afford to take the high risk of losing your money.
homesmartphonelaptop-phonemenumenu-circle linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram