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

UK services PMI overview

The UK economy will release its April services PMI later in the European session at 0830GMT, which is forecast to come in a tad weaker from March’s 55.0 to 54.5 last month. 

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 would now look forward to today's release of UK services PMI, which if failed to lend any additional support would turn the pair vulnerable to extend its corrective slide.

A follow through weakness below 1.2865-60 region, now seems to drag the pair towards 1.2835 intermediate support, en-route the 1.2800 handle.”

“On the flip side, 1.2915-25 area now seems to have emerged as immediate hurdle, but major upside resistance remains near mid-1.2900s,” Haresh adds.

Key notes

UK services PMI to slip from 55.0 to 54.5 in April - TDS

“We see some upside risk and look for an unchanged reading of 55.0 instead. After the upside surprises to the manufacturing and construction prints earlier this week, we feel a bit more confidence in our upside call.”

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.