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UK Services PMI beats with 55.6 – GBP/USD bounces

The UK services sector is more upbeat, according to Markit. The PMI jumped by 2 full points, exceeding expectations and hitting 55.6.

GBP/USD reacted positively by bouncing from the lows and reaching a high of 1.3075 before slipping back to 1.3062. The movements may be shallow as markets await the all-important Non-Farm Payrolls later in the day.

The purchasing managers’ index for the services sector was expected to tick down to 53.3 points in October from 53.6 in September. This is the third, last, and most important PMI: services is the largest sector.

GBP/USD was extending its falls, trading around 1.3045. Support awaits at 1.3030 and resistance at 1.3085.

Sterling fell to this low range after the BOE’s dovish hike. Mark Carney and his colleagues decided to raise the interest rate back to 0.50%, undoing the emergency rate cut following the Brexit vote in 2016. However, its forecasts and intentions point to only two more hikes within three years. This is much more gradual than the path of the Federal Reserve.

More:  GBP/USD: What is next after the BOE’s blow?

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.