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 eased from the previous month’s reading of 60.5 to 60.0 in January, still point to a decent expansion for the eighth consecutive month.

Joseph Trevisani, Senior Analyst at FXStreet explains: “The business community is preparing for the recovery with investment spending and inventory building, convinced that the retreat of the pandemic will not only enable a return to normal but encourage a burst of relief spending.”

How could it affect EUR/USD?

Ahead of the key release, the US dollar was back in demand amid disagreements over the US President Joe Biden’s proposed $1.9 trillion Covid relief package and seemed unaffected by a solid rebound in the equity markets. This, in turn, pushed the EUR/USD pair back below the 1.2100 round-figure mark, with bears now eyeing the next relevant support near the 1.2055 region.

A stronger-than-expected reading might be enough to provide an additional boost to the greenback and drag the pair further below the mentioned support, towards challenging the key 1.2000 psychological mark. Conversely, the market reaction to any disappointment is more likely to remain limited and do little to provide any meaningful lift to the EUR/USD pair.

Key Notes

  •  US Manufacturing PMI: Setting the stage for NFP

  •  US Dollar Index looks firm round 90.80 ahead of ISM

  •  EUR/USD Forecast: Extra consolidation looks likely

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).