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

The UK services PMI overview

The UK economy will release its July services PMI later in the European session at 0830GMT, which is expected to come in at 54.7 versus 55.1 booked in June.  

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: “The (recent) bearish momentum might now drag the pair even below YTD lows, around the 1.2960-55 region, towards testing a short-term descending trend-channel support, currently near the 1.2900-1.2890 region. Alternatively, a move back above 1.3035 level is likely to assist the pair to recover further towards 1.3065-70 resistance. However, any subsequent up-move now seems more likely to remain capped at the neckline support break-point, now turned resistance, near the 1.3095-1.3100 region.”

Key Notes

UK: Services PMI likely to remain unchanged at 55.1 for July - TDS

Trading the UK Services PMI with GBP/USD

GBP/USD Technical Analysis: Sterling traders struggling to keep the pair above 1.30

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.