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 14:00 GMT this Wednesday. Consensus estimated a modest deceleration in growth to 55.9 for the month of June as compared to a three-month high level of 56.9 recorded in the previous month.
According to analysts at Danske Bank - “The ISM non-manufacturing survey will be giving an interesting indication of whether the service sector is feeling the pinch from the troubles in the manufacturing sector and global economy. Market consensus expects a reading of 56.5. The service PMI has dropped in recent months to nearly 50, which has been a worry for the Fed. Hence a poor reading today would ignite expectations of a considerable upfront Fed easing.”
Deviation impact on EUR/USD
Readers can find FX Street's proprietary deviation impact map of the event below. As observed, the reaction in case of a relative deviation of -0.70 or +0.63 is likely to be in the range of 21-26 pips in the first 15-minutes and could stretch to around 51-pips in the subsequent 4-hours.
How could it affect EUR/USD?
Yohay Elam, FXStreet's own analyst outlines the technical set-up and offers important levels to trade the EUR/USD pair – “Initial support awaits at 1.1270, the daily low. It is closely followed by 1.1250 that capped the pair in mid-June. Next, 1.1220 was a swing low in early June and a support line later that month. 1.1180 follows closely.”
“Resistance awaits at 1.1320 which capped it on Tuesday. Close by, 1.1350 is a separator of ranges, first holding the pair down in mid-June and then providing support later that month. 1.1390 and 1.1410 are next,” he added further.
Key Notes
• US Services PMI Preview: Worry is normal but contained
• EUR/USD Technical Analysis: Upside limited by the 200-day SMA at 1.1337
• EUR/USD faces a wall of resistance as markets digest Lagarde's nomination – Confluence Detector
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.
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