The US ISM data illustrates the risk that confidence in the US and global economy will deteriorate again as the services-sector comes under pressure under the weight of rising unemployment. Markets will continue to look for opportunities to push the US currency weaker, although resistance levels will remain tough to break above the 1.4440 region. Overall, the Euro is vulnerable to a further limited correction weaker towards 1.4325 against the dollar.
The US data on Wednesday was weaker than expected with an ADP employment decline of 371,000 for July compared with expectations of a 345,000 fall for the month.
The ISM report for the services sector weakened unexpectedly to 46.4 for July from 47.0 previously. The orders component deteriorated while the prices index was sharply weaker and the employment index was still depressed. In this environment, Friday€™s non-farm payroll estimates are liable to revised slightly lower which will curb risk enthusiasm over the next 36 hours