US ISM Manufacturing PMI Overview
The Institute of Supply Management (ISM) will release its latest manufacturing business survey result, also known as the ISM Manufacturing PMI at 14:00 GMT this Monday. Consensus estimate point to a modest rebound in the manufacturing sector activity in May. The gauge is seen to come in at 43.0 from 41.5 previous, though remain in the contraction territory for the third straight month due to the coronavirus-induced lockdowns.
How could it affect EUR/USD?
The market, in the recent past, has shrugged off a slew of disappointing macro releases. Hence, Monday's release of the US ISM Manufacturing PMI is unlikely to be a major game-changer for the EUR/USD pair, though might still produce some meaningful trading opportunities. Ahead of the important release, the pair receded from 2-1/2 month tops. A negative surprise might be enough to exert some fresh pressure on the already weaker US dollar and assist the pair to regain positive traction. Alternatively, a stronger than expected reading might provide some temporary respite to the USD bulls and prompt some additional long-unwinding trade around the major.
Meanwhile, Pablo Piovano, FXStreet's own analyst offered important technical levels to trade the EUR/USD pair: "The surpass of the 1.1150 region (late march tops) should open the door to a visit to the interim hurdle at 1.1187 (Fibo retracement of the 2017-2018 rally) ahead of the 1.1200 yardstick and the December’s high near 1.1240. In the broader picture, as long as the 200-day SMA, today at 1.1010, holds the downside, the outlook on the pair is expected to remain constructive. On the downside, the resumption of the selling bias is seen meeting moderate contention in the 1.1010/20 band, where coincide the 200-day SMA and the May 1 highs."
Key Notes
• EUR/USD Price Forecast: Door open for further upside
• EUR/USD Price Analysis: Upside could take a breather
• EUR/USD recedes from 2-month tops beyond 1.1150
About the US ISM manufacturing PMI
The Institute for Supply Management (ISM) Manufacturing Index shows business conditions in the US manufacturing sector. It is a significant indicator of the overall economic condition in the US. A result above 50 is seen as positive (or bullish) for the USD, whereas a result below 50 is seen as negative (or bearish).
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