When is the UK services PMI and how could it affect GBP/USD?
The UK services PMI overview
The UK economy will release its September services PMI later in the European session at 0830GMT, which is expected to come in at 54.0 versus 54.3 booked in August.
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: “A subsequent up-move beyond 50-day SMA and the 1.30 handle now support prospects for an extension of the recovery move back towards the 1.3040-50 supply zone. A follow-through buying interest has the potential to continue lifting the pair even beyond the 1.3100 handle towards 100-day SMA barrier, currently near the 1.3120 region. On the flip side, the ascending trend-line, currently near mid-1.2900s, might continue to protect the immediate downside, which if broken might turn the pair vulnerable to accelerate the slide towards the 1.2900 handle before eventually dropping to test the 1.2860-50 support area.”
Key Notes
UK: Services PMI to remain a little below its long-run average - Nomura
UK: Services PMI to decline to 54.0 in September - TDS
Market themes of the Day: War of words sees US Dollar benefitting
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.