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 Tuesday. The index is expected to drop sharply from the previous 52.9 and hit a record low level of 32 in April, further illustrating the extent of economic damage caused by the coronavirus-forced lockdowns.
How could it affect EUR/USD?
As Joseph Trevisani, FXStreet's Senior Analyst explains: “The dollar’s risk premium has slowly eroded as the coronavirus pandemic has habituated as a market threat and there have been no economic surprises.” Hence, the release seems unlikely to be a major gamechanger or provide any meaningful impetus to the major.
Meanwhile, Yohay Elam, Analyst Forex Crunch offered important technical levels to trade the EUR/USD pair: “Below 1.0890, the next level to watch is 1.0860, which capped EUR/USD on the way up in late April, and by 1.0810, a support line from earlier last month. The next levels to watch are 1.0770 and 1.0730. Resistance is at 1.0930, a temporary support line on Monday, followed by 1.0970, a swing high on the way up, and by April's peak of 1.0995.”
Key Notes
• US ISM Non-Manufacturing PMI Preview: Will April’s statistics reignite the safety trade?
• EUR/USD Forecast: How the bounce over critical support could prove a selling opportunity
• EUR/USD Price Analysis: Corrective downside could test 1.0730
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.
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.
The non-manufacturing purchasing managers’ index is expected to fall to 32 in April, a record low for this 23-year-old survey. If the prediction is accurate the drop from 52.5 in March would be the largest one month fall in the history of the series. The crucial employment and new orders indexes are also set to plumb new depths.
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