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 Thursday 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 improved to 55.2 in November, beating the estimate and climbing to an 11-month high. The estimate for the December release is 54.8.
Sentiments and levels
Strong US growth and a red-hot labor market prompted the Federal Reserve to finally raise rates in December. With the Trump presidency just a few weeks away, the markets are expecting US growth to continue. This could mean more rate hikes from the Federal Reserve which would boost the greenback. So, the overall sentiment is bearish on GBP/USD towards this release.
Technical levels, from top to bottom: 1.2674, 1.2512, 1.2311, 1.2201, 1.2080 and 1.1943
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 62.0: An unexpected higher reading can send the pair above one resistance line.
- Well above expectations: Above 62.1: Such an outcome would likely prop up the pound, and a second resistance line might be broken as a result.
- Below expectations: 48.0 to 51.9: A soft reading could push GBP/USD downwards and break one level of support.
- Well below expectations: Below 48.0: 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.
Share
