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 gauge is expected to have edged higher to 63.5 in June from 64 previous. Conversely, the employment sub-component is anticipated to rise to 57 during the reported month as compared to 55.3 in May. The key focus, however, will be on the Prices Paid sub-component, which represents inflation and is expected to ease to 79.3 in June from 80.6 previous.
How Could it Affect EUR/USD?
Ahead of the key data, the EUR/USD pair witnessed a turnaround from the vicinity of the 1.1900 mark and moved well within the striking distance of multi-month lows touched on Friday. A plunge in the German ZEW Economic Sentiment Index was seen as a key factor that weighed on the shared currency. A stronger report might provide a modest lift to the US dollar and exert some additional pressure on the major.
Meanwhile, investors now seem convinced that the Fed will wait longer before tapering its asset purchases or raising interest rates might cap gains for the greenback. A softer reading will reaffirm market expectations and act as a headwind for the greenback. This, in turn, should extend some support to the major and help limit any deeper losses, suggesting that the market reaction to the report is more likely to be limited.
Meanwhile, Valeria Bednarik, Chief Analyst at FXStreet offered a brief technical outlook: “The EUR/USD pair offers a neutral-to-bearish stance. The 4-hour chart shows that the pair is comfortable below a directionless 20 SMA, while the longer ones extend their declines above it. Technical indicators are flat, the Momentum around its midline and the RSI within negative levels, anticipating another leg lower on a break below 1.1800.”
Key Notes
• ISM Services PMI Preview: Why the inflation component could trigger a dollar rebound
• EUR/USD Forecast: Pressure mounts, poised to challenge 1.1800
• EUR/USD Price Analysis: Another visit to 1.1800 remains on the cards
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.
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 holds gains above 1.0700, as key US data loom
EUR/USD holds gains above 1.0700 in the European session on Thursday. Renewed US Dollar weakness offsets the risk-off market environment, supporting the pair ahead of the key US GDP and PCE inflation data.
GBP/USD extends recovery above 1.2500, awaits US GDP data
GBP/USD is catching a fresh bid wave, rising above 1.2500 in European trading on Thursday. The US Dollar resumes its corrective downside, as traders resort to repositioning ahead of the high-impact US advance GDP data for the first quarter.
Gold price edges higher amid weaker USD and softer risk tone, focus remains on US GDP
Gold price (XAU/USD) attracts some dip-buying in the vicinity of the $2,300 mark on Thursday and for now, seems to have snapped a three-day losing streak, though the upside potential seems limited.
XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger
Ripple extends decline to $0.52 on Thursday, wipes out weekly gains. Crypto expert asks Ripple CTO how the stablecoin will benefit the XRP Ledger and native token XRP.
US Q1 GDP Preview: Economic growth set to remain firm in, albeit easing from Q4
The United States Gross Domestic Product (GDP) is seen expanding at an annualized rate of 2.5% in Q1. The current resilience of the US economy bolsters the case for a soft landing.