The British Services PMI (Purchasing Managers’ Index) 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 Monday 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.
The index has increased for three consecutive months, reaching 56.0 in February. The March forecast calls for a slight drop to 55.0. The services sector has been a bright spot in the UK economy, as the index has been above the important 50 level since January 2011.
Sentiments and levels
GBP/USD showed signs of upward movement last week. The pair touched just under the important 1.60 level, as the pair reached its highest level since November 2011. The pound seems to be on the move, and barring any unexpected economic news, could push towards 1.60. So, the overall sentiment is bullish on GBP/USD towards this release.
Technical levels, from top to bottom: 1.5992, 1.59, 1.5860, 1.5750, 1.5720 and 1.5629.
5 Scenarios
- Within expectations: 52.0 to 58.0: In such a case, GBP/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 58.1 to 61.0: An unexpected higher reading can send the pair well above one resistance line.
- Well above expectations: Above 61.0: Such an outcome would prop up the GBP, and a second resistance line might be broken as a result.
- Below expectations: 49.0 to 51.9: A sharper decrease than forecast could push GBP/USD downwards and break one level of support.
- Well below expectations: Below 49.0: A reading well below the 50 level would indicate substantial contraction in the services sector. This would likely push the pair downwards, possibly breaking a second support level.
For more about the pound, see the GBP/USD forecast.
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