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 15:00 GMT this Monday. The index is anticipated to have edged higher to 65.0 in April from the 38-year high level of 64.7 recorded in the previous month.

Joseph Trevisani, Senior Analyst at FXStreet explains: “The waning of the pandemic has not only released a tide of business delayed by last year's lockdowns, but consumers are spending in relief and enjoyment. Congress will pass some version of the Biden administration’s infrastructure bill adding to the flood of spending coming out of the capitol. That era of good feeling is likely to last well into the second half as even the die-hard centers of restriction like New York City end their business inhibitions by July 1. Managers have every reason to expect the good times to last until the end of the year.”

How could it affect EUR/USD?

Ahead of the key release, the emergence of some fresh selling around the US dollar assisted the EUR/USD pair to regain positive traction and recover a part of Friday's losses. A strong reading will add to the narrative for a relatively faster US economic recovery from the pandemic, though might do little to shit expectations that the Fed will keep interest rates low for a longer period. Hence, the key focus will remain on Fed Chair Jerome Powell's speech later during the US session, suggesting that any immediate market reaction is more likely to be short-lived.

Meanwhile, Yohay Elam, FXStreet's own analysis provided a brief technical outlook for the EUR/USD pair: “Momentum on the four-hour chart has turned to the downside and the currency pair dipped below the 100 Simple Moving Average in addition to slipping below the 50 SMA earlier on. The Relative Strength Index (RSI) also sheds ground, but it is holding above 30 – thus outside oversold conditions.”

Yohay also offered important technical levels to trade the major: “Critical support is at 1.1990, just below the psychological barrier of 1.20. That was a clear separator of ranges last month. It is followed by 1.1950, 1.1930, and then 1.1860. Some resistance is at 1.2050, a support line from last week, and then by 1.2080 and 1.2117, both swing highs on the way up. The April peak of 1.2150 is the next level to watch.”

Key Notes

  •  US ISM Manufacturing PMI April Preview: Let the good times roll

  •  EUR/USD Forecast: Sell in May and go away? Fundamentals and technicals point to further losses

  •  EUR/USD: Short-term bias shifts to the downside – UOB

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).