US ISM Non-Manufacturing PMI Overview
The Institute of Supply Management (ISM) will release the Non-Manufacturing Purchasing Managers’ Index (PMI) – also known as the ISM Services PMI at 15:00 GMT this Wednesday. Consensus estimates point a slightly slower pace of expansion and the index is seen edging lower to 54.9 for February as compared to the previous month’s reading of 55.5.
As Joseph Trevisani, NDDFX’s Senior Analyst explains: “Despite the virus induced plunge in February’s official PMIs in China to 29.6 in services and 35.7 for manufacturing, the impact the US has been limited though that could change if the supply disruption prolongs. Indeed, the very size of the mainland collapse in sentiment argues that it is artificial and will recover.”
How could it affect EUR/USD?
As investors digested the Fed’s surprise move to cut interest rates by 50 bps on Tuesday, the US dollar is unlikely to make a big down move in case of any disappointment from the headline reading. Conversely, a stronger reading might provide some respite to the USD bulls and prompt some aggressive long-unwinding trade around the major.
Yohay Elam, NDDFX’s own analyst offered important technical levels to trade the EUR/USD pair: “Resistance awaits at 1.1180, which was a swing high earlier this week. It is followed by 1.1215, Tuesday’s high –which is also the peak for 2020. Next, 1.1240 is eyed.”
“Support awaits at 1.1140, the daily low, followed by 1.1120, a high point from earlier this year, and by the round number of 1.11. It worked as support this week and as a resistance line in early February. 1.1050 and 1.1010 are next,” he added further.
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About the US ISM Non-Manufacturing PMI
The ISM Non-Manufacturing Index released by the Institute for Supply Management (ISM) shows business conditions in the US non-manufacturing sector. It is worth noting that services constitute the largest sector of the US economy and result above 50 should be seen as supportive for the USD.