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

UK services PMI overview

The UK economy will release its August services PMI later in the European session at 0830GMT, which is expected to edge slightly lower to 53.5 from July’s 53.8.

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: “On a sustained move beyond 1.2975 strong hurdle, a bought of short-covering should lift the pair beyond the key 1.30 psychological mark towards its next resistance near 1.3030-35 zone.”

“Meanwhile, on the downside, any weakness below the 1.29 handle might continue to find support near 1.2875-70 area, which if broken would turn the pair vulnerable to aim towards testing a short-term ascending trend-line support near the 1.2825 region,” Haresh adds.

Key notes

UK: Looking for a slight downturn in Services PMI to 53.5 - TDS

Eurozone retail sales and UK services PMI amongst market movers today – Danske Bank

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.