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

The UK services PMI overview

The UK economy will release its June services PMI later in the European session at 0830 GMT, which is expected to come in at 51.0, unchanged from the May reading. 

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 overnight break below the 1.2610-1.2600 region (61.8% Fibo. level of the 1.2506-1.2784 recent corrective bounce) sets the stage for a move back towards challenging the key 1.2500 psychological mark with some intermediate support near the 1.2540-30 region. On the flip side, the 1.2600-10 support breakpoint now seems to act as an immediate resistance, which if cleared might lift the pair further towards the 1.2645-50 supply zone – coinciding with 50% Fibo. Level.” 

At the press time, the Cable prints two-week lows of 1.2564 amid BOE Governor Carney’s downbeat remarks and looming trade anxiety.

Key Notes

Pound offered before services PMI, equities and oil ease as gold gains

GBP/JPY - Negative break of key Average to Deepen

GBP Futures: room for further downside

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.