When is the US ISM Manufacturing PMI and how could it affect EUR/USD?
US ISM Manufacturing PMI Overview
The Institute of Supply Management (ISM) will release its latest manufacturing business survey result, also known as the ISM Manufacturing PMI at 14:00 GMT this Tuesday. Consensus estimate point to a modest pickup in the manufacturing sector activity and the index is seen rebounding to 50.1 in September from the previous month's reading of 49.1 – marking the first month of contraction since January 2016.
Meanwhile, the research team of TD Securities is looking for a rebound in the US ISM index to 50.8 amid easing trade tensions, which might have marginally boosted business sentiment in September. “Although the regional surveys continue to give mixed signals, the average of the ISM-adjusted versions is pointing to some improvement since August. In addition, a recent spate of stable capex orders, improving China PMIs and a firmer Markit manufacturing index also boost the odds for a positive surprise, in our view.”
Deviation impact on EUR/USD
Readers can find FX Street's proprietary deviation impact map of the event below. As observed, the reaction in case of a relative deviation of -0.74 or +0.67 is likely to be in the range of 13-22 pips in the first 15-minutes and could stretch to around 45-63 pips in the subsequent 4-hours.
How could it affect EUR/USD?
Ahead of the release, Yohay Elam - FXStreet's own Analyst offered important technical levels to trade the EUR/USD pair and wrote – “The fresh low of 1.0880 is the immediate line of support. Further down, the lines date back to April 2017 – two and a half years ago. 1.0820 was where EUR/USD jumped to in a weekend gap back then. On the previous weekend, it closed at 1.0780. These gap lines are both support lines now. Further down, 1.0720 and 1.0650 await the pair.”
“Looking up, resistance awaits at 1.0905, which was the previous 2019 low. Next, we find 1.0926 – a double-bottom in September. Next, 1.0965 capped the pair in late September and worked as support beforehand. Further up, 1.1025 held it down before the recent downfall,” he added further.
Key Notes
• US Manufacturing ISM Purchasing Managers’ Index Preview: Too soon to cheer
• EUR/USD Forecast: Only oversold conditions can slow the downfall in a data-packed day
• EUR/USD trims losses and returns near 1.09, focus on ISM
About the US ISM manufacturing PMI
The Institute for Supply Management (ISM) Manufacturing Index shows business conditions in the US manufacturing sector. It is a significant indicator of the overall economic condition in the US. A result above 50 is seen as positive (or bullish) for the USD, whereas a result below 50 is seen as negative (or bearish).