When is the UK services PMI and how could it affect GBP/USD?
The UK services PMI overview
The UK economy will release its December services PMI later in the European session at 0930GMT, which is expected to come in at 50.7 versus 50.4 booked in November.
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 managed to hold and rebound sharply from support, marked by 61.8% Fibonacci expansion level of the 1.3175-1.2477 downfall, and a subsequent bounce. Currently placed at 61.8% Fibonacci retracement level of this week's sharp fall, a follow-through buying now seems to lift the pair back towards reclaiming the 1.2700 handle. The momentum could further get extended but seems more likely to remain capped around the 1.2750 supply zone, also nearing 50-day SMA. On the flip side, the 1.2600 handle, coinciding with 50% Fibonacci retracement level, now seems to protect the immediate downside, below which the pair is likely to slide back towards the 1.2555 intermediate support (38.2% Fibonacci retracement level) en-route the key 1.2500 psychological mark.”
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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.