The US ISM Non-Manufacturing PMI (Purchasing Managers’ Index) is based on a survey of purchasing managers, excluding those in the manufacturing sector. Respondents are surveyed for their view of the economy and business conditions in the US. A reading which is higher than the market forecast is bullish for the dollar.
Here are all the details, and 5 possible outcomes for EUR/USD.
Published on Tuesday at 14:00 GMT.
Indicator Background
Analysts are always interested in the views of purchase managers about the economy, as they are considered to be attuned to the latest economic and financial developments, and their expectations could be an indication of future economic trends. Thus, PMI readings are quite important, and an unexpected reading (higher or lower than the forecast) could affect the movement of EUR/USD.
The February report was almost unchanged at 53.4 points, slightly above the estimate of 53.2 points. The estimate for March stands at 54.1 points.
Sentiments and levels
Janet Yellen has served notice that Federal Reserve has no plans to raise rates and let the dollar rise, which basically matches the ECB. This could continue for a short time, but Draghi may to push the euro down and announce some easing measures at the next policy meeting. So, the overall sentiment is neutral on EUR/USD towards this release.
Technical levels, from top to bottom: 1.1712, 1.15, 1.1460, 1.1365, 1.13 and 1.1220.
5 Scenarios
- Within expectations: 51.0 to 58.0: In such a case, EUR/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 58.1 to 62.0: An unexpected higher reading can send the pair below one support level.
- Well above expectations: Above 62.0: A sharp jump by the PMI could push EUR/USD downwards, and a second support level might be broken as a result.
- Below expectations: 48.0 to 50.9: A weak reading could push the pair upwards and break one resistance line.
- Well below expectations: Below 48.0: A sharp contraction by the index would indicate contraction in the services sector. This could push the pair higher, possibly breaking a second resistance line.
For more on the euro, see the EUR/USD forecast.
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