UK Services PMI is based on a survey of purchasing managers in the services sector. Respondents are surveyed for their view of the economy and business conditions in the UK. A reading which is higher than the market forecast is bullish for the pound.
Here are all the details, and 5 possible outcomes for GBP/USD.
Published on Wednesday at 9:30 GMT.
Indicator Background
Market analysts are always interested in the views of purchase managers on the economy, as the latter are considered to be attuned to the latest economic and financial developments, and their expectations could be an indication of future economic trends.
Services PMI edged lower in September, coming in at 52.6. This beat the forecast of 52.1 points. Little change is expected in October, with an estimate of 52.5 points.
Sentiments and levels
The BoE is expected to leave the benchmark rate at 0.25%, and this would amount to a vote of confidence in the economy, which could help the pound move upwards. At the same time, Brexit jitters remain. In the US, sentiment is high regarding a rate hike in December, which is bullish for the greenback. So, the overall sentiment is neutral on GBP/USD towards this release.
Technical levels, from top to bottom: 1.2620, 1.2447, 1.2130, 1.11943 and 1.1844
5 Scenarios
- Within expectations: 49.0 to 56.0: In such a case, GBP/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 56.1 to 59.0: An unexpected higher reading can send the pair above one resistance line.
- Well above expectations: Above 59.1: Such an outcome would likely prop up the pound, and a second resistance line might be broken as a result.
- Below expectations: 44.0 to 48.9: A soft reading could push GBP/USD downwards and break one level of support.
- Well below expectations: Below 44.0: A reading pointing to significant contraction could push the pair below a second support level.
For more about the pound, see the GBP/USD forecast.
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