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 Thursday. The gauge is expected to have eased to 56.0 in November from the previous month's reading of 56.6. Meanwhile, the employment sub-component is expected to have rebounded to 50.9 points from 50.1 previous and the New Orders Index is projected to fall to 49.6 from 58.8.
How could it affect EUR/USD?
Ahead of Thursday's data, the US dollar index plunged to more than two-year lows amid hopes for additional US fiscal stimulus and optimism over the roll-out of a COVID-19 vaccine. This, in turn, pushed the EUR/USD pair to the highest level since April 2018, around the 1.2160 region. A surprisingly stronger reading might provide a modest lift to the greenback and prompt some profit-taking around the major. That said, the reaction is likely to remain short-lived ahead of the closely- watched US monthly jobs report (NFP), scheduled for release on Friday.
As Valeria Bednarik, FXStreet's Chief Analyst, writes: “The EUR/USD pair is overbought in the short-term but still poised to advance. The 4-hour chart shows that technical indicators resumed their advance after a modest corrective decline, holding within overbought levels. The 20 SMA continues advancing below the current price and above the longer ones, which slowly gain momentum. The overbought conditions may result in a corrective decline, but buyers will likely add at lower levels, with 1.2000 now acting as a critical barrier.”
Key Notes
• US Services PMI November Preview: Are initial claims the sign markets think?
• EUR/USD Forecast: At fresh YTD highs and still advancing
• EUR/USD Price Analysis: Up up up it goes
About the US ISM Services 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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