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

The UK services PMI overview

The UK economy will release its April services PMI later in the European session at 0830GMT, which is expected to rebound to 53.5 versus 51.7 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 explains: “A slightly better-than-expected UK data could prompt some fresh short-covering move back towards 1.3630 medium-term trend-line support break turned resistance. A follow-through buying interest, leading to a breakthrough previous session swing high resistance near the 1.3665 region, has the potential to continue lifting the pair further towards reclaiming the 1.3700 handle.”

“On the flip side, 1.3565-60 area, followed by the 1.3535 region (200-day SMA) now seems to protect the immediate downside, which if broken would turn the pair vulnerable to extend its near-term bearish trajectory,” Haresh adds.

Key Notes

GBP/USD trying to gather some momentum ahead of the UK Services PMI

GBPUSD: near-term resistance will be seen at 1.3600

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.