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

The UK services PMI overview

The UK economy will release its October services PMI later in the European session at 0930GMT, which is expected to come in a tad weaker at 53.3 versus 53.6 booked last.

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: “A clear break below the trend-line support, currently near the 1.3045-40 region, would confirm a fresh bearish break and turn the pair vulnerable to accelerate the fall towards the key 1.30 psychological mark before eventually dropping to an important support near mid-1.2900s, marking 61.8% Fibonacci expansion level of 1.3657-1.3027 downfall and subsequent rebound.”

“On the flip side, any up-move back above the 1.3085 region (100-day SMA), and the 1.3100 handle, is likely to confront immediate resistance near 1.3130 area, which if cleared could trigger a short-covering bounce back towards the 1.3100 handle,” Haresh adds.

Key notes

GBP/USD headed to 1.3100 ahead of UK PMI, NFP

European FX Outlook: Friday’s market moving events

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.