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 15:00 GMT this Monday. The index is anticipated to have ticked higher to 58.8 in February from the 58.7 previous, marking expansion for the ninth straight month.
Joseph Trevisani, Senior Analyst at FXStreet explains: “Business executives have been cautiously optimistic for several months, investing but not hiring. While January's near record run in US Retail Sales and the looming end of the pandemic may suggest that that the recovery is at hand, employment will likely remain restrained for some time.”
How could it affect EUR/USD?
Ahead of the key release, the US dollar was back in demand and dragged the EUR/USD pair to one-and-half-week lows, further below mid-1.2000s. An upbeat reading will further fuel expectations for a relatively stronger US economic recovery and might be enough to provide an additional lift to the greenback. Conversely, the market reaction to a softer reading is more likely to remain limited. This, in turn, suggests that the path of least resistance for the major remains on the downside.
Meanwhile, Valeria Bednarik, Chief Analyst at FXStreet provided a brief technical outlook for the major and offered important technical levels to trade: “The EUR/USD pair is trading below the 38.2% retracement of its November/January rally at 1.2060, the immediate resistance level. The near-term picture is bearish, as EUR/USD is developing below all of its moving averages, with the 20 SMA accelerating south above the larger ones. Technical indicators hover near oversold readings, partially losing their bearish strength as the pair bounced from daily lows. Nevertheless, the risk remains skewed to the downside, with the next Fibonacci support at 1.1970.”
Key Notes
• US ISM Manufacturing PMI February Preview: Will business catch up with consumers?
• EUR/USD Forecast: Euro suffers below resistance, ECB's reluctance and US data may keep it down
• EUR/USD Forecast: Pressure mounts on US stimulus hopes
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).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.