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 at 53.3 versus 53.9 booked in September.
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 on Friday faced rejection at an important confluence hurdle, comprising of 100-day SMA and 61.8% Fibonacci retracement level of the 1.3258-1.2694 recent downfall. Hence, it would be prudent to wait for a convincing break through the mentioned barrier before traders start positioning for any further near-term appreciating move in the near-term. On a sustained move beyond the said resistance near the 1.3040 region, the pair is likely to aim towards reclaiming the 1.3100 handle before eventually darting towards its next hurdle near mid-1.3100s. On the flip side, the 1.2965-60 region now seems to have emerged as an immediate support, below which the pair is likely to extend the corrective slide further towards 38.2% Fibonacci retracement level support near the 1.2910-1.2900 area.”
FX Today: GBP – a big mover in Asia on mixed Brexit news, focus on UK services PMI
UK: Downside risks to the October Services PMI – TDS
UK: Decline coming in Services PMI – Nomura
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.