When is UK services PMI and how could affect GBP/USD?

UK services PMI overview

The UK economy will release its June services PMI later in the European session at 0830GMT, which is forecast to drop to 53.5 from May’s 53.8.

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 notes: “Traders are likely to wait for a decisive break through the said narrow range before positioning for the next leg of directional move. A convincing break below the 1.2900 handle, leading to a subsequent drop below 1.2870-60 confluence support, would confirm a fresh bearish breakdown and turn the pair vulnerable to extend the near-term corrective slide towards 1.2760-55 support area marking 61.8% Fibonacci retracement level of 1.2589-1.3030 recent up-leg. Intermediate support is pegged at 50% Fibonacci retracement level near the 1.2800 round figure mark”

“Alternatively, a sustained move above mid-1.2900s has the potential to continue boosting the pair back towards the key 1.30 psychological mark,” Haresh adds.

Key notes

UK services PMI and FOMC Minutes amongst market movers today – Danske Bank

UK: Downside risks for services PMI - TDS

About 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.