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 Tuesday. Consensus estimate point to a modest pullback in the manufacturing sector activity and the index is seen edging down from the previous month’s reading of 57.5 to 56.6 in December, still marking the seventh consecutive month of expansion.

Joseph Trevisani, Senior Analyst at FXStreet explains: “Manufacturing executives are looking and planning for the end of the pandemic sometime in the spring or early summer. Despite the gloom in the labor market that expectation should continue to keep the factory outlook optimistic.”

How could it affect EUR/USD?

Ahead of the key release, the US dollar languished near two-and-half-year lows amid hopes for strong global economic recovery in 2021. A stronger reading might not be enough to provide any meaningful boost to the greenback amid the likelihood of more US financial aid. Hence, the key focus will remain on the US Senate runoffs in Georgia. The outcome of two Senate seats will determine the control of the chamber and also have a big impact on the incoming US President Joe Biden's ability to pursue his preferred economic policies, including boosting stimulus and infrastructure spending.

Conversely, a softer-than-anticipated print will further weigh on the already weaker greenback and push the EUR/USD pair further beyond double-top resistance near the 1.2310 area. Meanwhile, FXStreet’s own Analyst Yohay Elam provided important technical levels to trade the major: “Some resistance was at the daily high of 1.2280. It is followed by the critical double top of 1.2310. Above that level, the stretch target for the pair is 1.24. Support is at 1.2240, the daily low, followed by 1.2210, a swing low in the late hours of 2020. Further down, 1.2175 awaits EUR/USD.”

Key Notes

  •  US Manufacturing PMI December Preview: COVID is the present but recovery is the future

  •  EUR/USD Forecast: Ready to crack the double-top? Georgia elections are critical

  •  EUR/USD Price Analysis: Door open for the continuation of the uptrend

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).