When is the UK services PMI and how could it affect GBP/USD?

The UK services PMI overview

The UK economy will release its January services PMI later in the European session at 0930GMT, which is expected to arrive a tad firmer at 54.3 versus 54.2 booked last.

Deviation impact on GBP/USD

Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined between 10 and 50 pips in deviations up to 2.5 to -2, although in some cases, if notable enough, a deviation can fuel movements of up to 70 pips.

How could affect GBP/USD?

"Technically, the pair on Friday slipped below 1.4135-30 support area, marking 23.6% Fibonacci retracement level of 1.3458-1.4345 recent upsurge, and hence, seems vulnerable to extend the corrective slide further towards 38.2% Fibonacci retracement level support, also coinciding with the key 1.40 psychological mark. On the flip side, any meaningful upside now seems to confront immediate resistance near mid-1.4100 level and the 1.4200 handle should now keep a lid on subsequent up-moves,” Haresh Menghani, Analyst at FXStreet explains.

Key notes

UK: Services PMI should outperform the softer January data – TDS

European FX Outlook: Services activity to set the sentiment

About the UK services PMI

The PMI service released by both the Chartered Institute of Purchasing & Supply and the Markit Economics is an indicator of the economic situation in the UK services sector. It captures an overview of the condition of sales and employment. It is worth noting that the UK service sector does not influence, either positively or negatively, the GDP as much as the Manufacturing PMI does. Traders want the highest possible reading as that will be taken as positive for the GBP. Any reading above 50 signals expansion, while a reading under 50 shows contraction.