ISM Services PMI Expected to Confirm US Economic Resilience in September
The US ISM Services PMI report, set for release on Monday at 14:00 GMT, is expected to show a slight improvement in September. Analysts predict a marginal increase to 55.7 from August’s 55.4, indicating continued expansion in the services sector. While the August data was mixed, highlighting stronger hiring and new orders alongside rising inflation pressures, the upcoming report is unlikely to significantly alter the current economic outlook.
The ISM Employment Index rose to 47.8 in August, up from 47.4, while the New Orders Index climbed to 60.9, suggesting growing demand. However, the Prices Paid Index also increased to 72.6, signaling persistent inflationary pressures. Despite recent signs that inflation may be easing, Fed officials remain cautious, keeping the possibility of further rate hikes on the table.
An ISM Services PMI in line with expectations is unlikely to move the US Dollar significantly, as it would merely confirm the economy’s resilience amid sticky inflation. However, a weaker-than-expected reading could shake investor confidence, potentially leading to a reduction in USD holdings. The release comes as the EUR/USD pair faces further downside pressure, with key support levels identified at 1.1064 and 1.1000.
Pablo Piovano, Senior Analyst at FXStreet, notes that the EUR/USD pair has broken below its critical 200-day SMA, signaling a bearish trend. If the pair fails to reclaim the 1.1515-1.1520 zone, further declines toward 1.1064 and beyond could be expected. Conversely, a bounce could emerge if momentum indicators shift, though the current trend remains robust.