#EURUSD @ 1.05664 When is the US ISM Services PMI and how could it affect ?
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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 Monday. The gauge is expected to edge down to 53.1 in November from 54.4 in the previous month. Given that the Fed looks more at inflation than growth, investors will keep a close eye on the Prices Paid sub-component, which is anticipated to rise from 70.7 in October to 73.6 during the reported month.
Ahead of the key release, the US Dollar drops to over a five-month low amid growing acceptance that the Fed will slow the pace of its rate-hiking cycle. Any disappointment from the US ISM Services PMI will reinforce expectations for a less aggressive policy tightening by the US central bank and exert additional downward pressure on the greenback. Conversely, a stronger reading might fail to impress the USD bulls, suggesting that the path of least resistance for the EUR/USD pair is to the upside.
Valeria Bednarik, Chief Analyst at FXStreet, offers a brief technical overview and explains: “The EUR/USD pair holds on to most of its early gains, and the daily chart shows that the risk is skewed to the upside. The pair is posting a third consecutive higher high, also higher lows, while extending gains beyond its 200 Simple Moving Average (SMA), currently at 1.0360. The 20 SMA kept advancing below the longer one and is close to crossing above it. Technical indicators, in the meantime, remain directionless, with the Momentum within positive levels and the Relative Strength Index (RSI) at around 70, without signs of bullish exhaustion.”
“The 4-hour chart shows that bulls retain control. An early dip to 1.0518 was quickly reverted, reflecting strong buying interest. At the same time, moving averages maintain their upward slopes below the current level, with the 20 SMA accelerating north and providing dynamic support at around 1.0480. Technical indicators lack directional strength but hold well above their midlines, in line with the absence of selling power,” Valeria adds further.
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• EUR/USD eyes additional gains to the 1.0650/1.0750 range – Scotiabank
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).
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