When is the UK services PMI and how could it affect GBP/USD?
The UK economy will release its November services PMI later in the European session at 0930GMT, which is expected to come in at 52.5 versus 52.2 booked in October.
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: “From a technical perspective, the pair’s repeated failure to sustain/build on its momentum beyond 200-hour EMA clearly points to persistent selling bias at higher levels. The pair’s inability to find acceptance above a short-term descending trend-line resistance further adds credence to the near-term negative outlook. Hence, the ongoing downfall seems more likely to get extended further towards testing the 1.2600 round figure mark. On the flip side, any attempted rebound beyond the 1.2700 handle might now confront fresh supply near the 1.2720-25 region, above which the recovery could get extended but seems more likely to remain capped near the 1.2750 resistance zone.”
Key Notes
Market themes of the Day: Brexit debate begins in the UK parliament before BoC keeps rates on hold
GBP/USD: Staring at the bottom of its 4-month trading range - Commerzbank
UK: Services PMI likely to remain unchanged at 52.2 in November - TDS
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.