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

The UK services PMI overview

The UK economy will release its February services PMI later in the European session at 0930GMT, which is expected to arrive a tad firmer at 53.3 versus 53.0 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: “From a technical perspective, the pair maintains a bearish bias on short-term charts and a daily close below 1.3760 horizontal support would mark breakdown from a short-term descending triangular formation. On a sustained weakness below the mentioned support should now turn the pair vulnerable to slide below the 1.3700 handle and head towards testing an intermediate support near mid-1.3600s en-route the 1.3600 round figure mark.”

“On the upside, any meaningful up-move beyond the 1.3800 handle is likely to confront some fresh supply at 50-day SMA, currently near the 1.3835-40 region, above which a bout of short-covering could lift the pair back towards reclaiming the 1.3900 handle,” Haresh Menghani, Analyst at FXStreet explains,” Haresh adds.

Key Notes

Forex Today: Euro hit by Italy hung parliament, UK services PMI eyed

GBP/USD looks weaker than ever ahead of UK services PMI release

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.