When is the US ISM Non-Manufacturing PMI and how could it affect EUR/USD?

Haresh Menghani FXStreet

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 steady and match the previous month's stronger-than-expected reading of 55.

Meanwhile, analysts at TD Securities forecast the ISM non-manufacturing index to rise modestly to 55.3 in Jan following an already-stronger print in Dec. “If confirmed, this should further support USD dominance over low-yielders such as the EUR.”

How could it affect EUR/USD?

Ahead of the release, the pair was seen extending its recent pullback and remained well within the striking distance of challenging the key 1.10 psychological mark. A stronger reading might be enough to provide an additional boost to the US dollar and continue exerting pressure on the major. Conversely, the market reaction is likely to be muted in case of a slightly disappointing reading. However, a big miss might prompt the USD bulls to take some profits off the table and provide some immediate respite to the major.

Valeria Bednarik, FXStreet's own Chief Analyst, offered the technical set-up and important levels to trade the major – “The EUR/USD pair is trading at daily lows near the 1.1000 level ahead of Wall Street’s opening, clearly bearish in the short-term. The 4-hour chart shows that it has extended its decline below all of its moving averages, in line with the strong selling interest. Technical indicators, in the meantime, head firmly south, nearing oversold levels. The pair has bottomed in January at 1.0991, although a stronger support comes at 1.0980 a relevant low from last November. The bearish momentum will likely increase on a break below this last.”

Key Notes

• US ISM Non-Manufacturing PMI January Preview: Manufacturing to the fore

• EUR/USD Forecast: More falls ahead? Coronavirus turning to a win-win for the dollar, data eyed

• EUR/USD New York Price Forecast: Euro under pressure, challenging 1.1016 support

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.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

EUR/USD hovers around 1.1850 ahead of FOMC Minutes

EUR/USD stays on the back foot around 1.1850 in the European session on Wednesday, pressured by renewed US Dollar demand. Traders now look forward to the Minutes of the Fed's January monetary policy meeting for fresh signals on future rate cuts.

GBP/USD defends 1.3550 after UK inflation data

GBP/USD is holding above 1.3550 in Wednesday's European morning, little changed following the UK Consumer Price Index (CPI) data release. The UK inflation eased as expected in January, reaffirming bets for a March BoE interest rate cut, especially after Tuesday's weak employment report.

Gold retains bullish bias amid Fed rate cut bets, ahead of Fed Minutes

Gold sticks to modest intraday gains through the early European session, reversing a major part of the previous day's heavy losses of more than 2%, to the $4,843-4,842 region or a nearly two-week low. That said, the fundamental backdrop warrants caution for bulls ahead of the FOMC Minutes, which will look for more cues about the US Federal Reserve's rate-cut path.

Pi Network rally defies market pressure ahead of its first anniversary

Pi Network is trading above $0.1900 at press time on Wednesday, extending the weekly gains by nearly 8% so far. The steady recovery is supported by a short-term pause in mainnet migration, which reduces pressure on the PI token supply for Centralized Exchanges. The technical outlook focuses on the $0.1919 resistance as bullish momentum increases.

Mixed UK inflation data no gamechanger for the Bank of England

Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.

Top 3 Price Prediction: Bitcoin, Ethereum, and Ripple face downside risk as bears regain control

Bitcoin, Ethereum, and Ripple remain under pressure on Wednesday, with the broader trend still sideways. BTC is edging below $68,000, nearing the lower consolidating boundary, while ETH and XRP also declined slightly, approaching their key supports.