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 8:30 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 dipped to 53.3 in February, shy of the forecast of 54.2 points. Little change is expected in March, with an estimate of 53.5 points.
Sentiments and levels
The US economy continues to fire on all cylinders, and the Fed is expected to hike rates two more times in 2017. The UK has weathered Brexit fairly well, but bad blood between the UK and the EU could chill negotiations over Brexit and hurt the pound. So, the overall sentiment is bearish on GBP/USD towards this release.
Technical levels, from top to bottom: 1.2860, 1.2775, 1.2548, 1.2345, 1.2213 and 1.2080
5 Scenarios
- Within expectations: 50.0 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: 46.0 to 50.9: A soft reading could push GBP/USD downwards and break one level of support.
- Well below expectations: Below 46.0: 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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