When is the UK services PMI and how could it affect GBP/USD?
The UK services PMI overview
The UK economy will release its March services PMI later in the European session at 0830GMT, which is expected to ease to 54.0 versus 54.5 booked last.
Deviation impact on GBP/USD
Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined between 10 and 50 pips in deviations up to 2.5 to -2, although in some cases, if notable enough, a deviation can fuel movements of up to 70 pips.
How could affect GBP/USD?
Haresh Menghani, Analyst at FXStreet explains: “momentum beyond the 1.4100 mark is likely to confront some aggressive supply near the 1.4140-50 region, marking a short-term ascending trend-channel support break-point now turned resistance. A convincing move beyond the said barrier might now negate prospects for any further decline and pave the way for a resumption of the pair's prior appreciating move.”
“On the flip side, the 1.4015-10 area, closely followed by 50-day SMA near the 1.3990 region, might continue to protect the immediate downside. A sustained weakness below the mentioned supports would confirm the near-term negative bias and accelerate the slide towards 1.3965 intermediate support before the pair eventually drops to test the 1.3900 round figure mark,” Haresh adds.
Key Notes
Economic Calendar Picks Up On Thursday
European FX Outlook: Services PMI set to complement the picture of a manufacturing slowdown
About the UK services PMI
The PMI service released by both the Chartered Institute of Purchasing & Supply and the Markit Economics is an indicator of the economic situation in the UK services sector. It captures an overview of the condition of sales and employment. It is worth noting that the UK service sector does not influence, either positively or negatively, the GDP as much as the Manufacturing PMI does. Traders want the highest possible reading as that will be taken as positive for the GBP. Any reading above 50 signals expansion, while a reading under 50 shows contraction.
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
