When is the US ISM Services PMI and how could it affect EUR/USD?

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 further to 54.6 in December from the previous month's reading of 55.9. The employment sub-component is also expected to have edged lower to 50.7 from 51.5 in November. Meanwhile, the New Orders Index is projected to fall to 54.9 from 57.2.

How could it affect EUR/USD?

Ahead of the key release, the US dollar index staged a solid rebound from nearly three-year lows and prompted some profit-taking around the EUR/USD pair. Given that the USD recovery is sponsored by a strong rally in the US Treasury bond yields, the data is unlikely to provide any meaningful impetus. Increasing prospects for additional US fiscal stimulus measures might continue to lift the US bond yields, which, in turn, should lend support to the greenback. Hence, the path of least resistance for the pair appears to be on the downside.

In the meantime, Yohay Elam, FXStreet's own analyst outlined important technical levels for the EUR/USD pair: “Some support awaits at 1.2265, the daily low, followed by 1.2245, a low point early in the week, followed by 1.2210 and 1.2175. Resistance is at 1.2310, the previous 2021 high, followed by 1.2350, which is emerging as a double top. The next cap is 1.24.”

Key Notes

  •  ISM Services Purchasing Managers' Index December Preview: Business optimism is fine but the dollar needs jobs

  •  EUR/USD Forecast: Why any bearish takeover is set to be temporary, levels to watch

  •  EUR/USD Price Analysis: Corrective downside could test 1.2200

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.