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

UK services PMI overview

The UK economy will release its July services PMI later in the European session at 0830GMT, which is expected to edge slightly higher to 53.6 from June’s 53.4.

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: “The mentioned level, around 1.3250 region remains immediate strong hurdle, which if conquered should pave way for continuation of the pair’s appreciating move even beyond the 1.3300 handle towards its next resistance near 1.3335-40 horizontal zone.”

“Alternatively, profit taking slide below the 1.3200-1.3190 region could get extended towards 1.3135-30 intermediate support en-route the ascending trend-line support, currently near the 1.3100 mark. Only a decisive break below the said handle would negate any near-term bullish bias and trigger a near-term corrective slide initially towards 1.3030 resistance turned support area and eventually below the key 1.30 psychological mark,” Haresh adds.

However, limited impact may be seen on the PMI release, as the main market moving event for the pound today remains the BOE policy decision and accompanying inflation report.

Key notes

GBP/USD finds support near 1.3210 ahead of BoE, PMI

GBP/USD - stuck at the rising wedge hurdle, 3M risk reversals rise and yield spread nears support

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.