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

The UK services PMI overview

The UK economy will release its February services PMI later in the European session at 0930GMT, which is expected to come in at 49.9 versus 50.1 booked in January. 

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, any subsequent fall seems more likely to find support near 23.6% Fibonacci retracement level of the 1.2396-1.3350 recent upsurge, around the 1.1325-20 region. Sustained weakness below the mentioned support might prompt some aggressive technical selling and accelerate the fall further towards challenging confluence support near the key 1.30 psychological mark - comprising of the very important 200-day SMA and 38.2% Fibonacci retracement level.”

“On the flip side, the 1.3200 round figure mark now becomes immediate resistance, above which the pair is likely to move back towards testing an intermediate hurdle near the 1.350 region before eventually aiming back towards reclaiming the 1.3300 handle,” Haresh adds.

Key Notes

UK: Services PMI likely to remain roughly unchanged in February - TDS

GBP/USD may struggle to recover 1.3200 after the recent fall — Confluence Detector

GBP futures: potential rebound in the cards

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.