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

The UK services PMI overview

The UK economy will release its May services PMI later in the European session at 0830 GMT, which is expected to come in at 50.6 versus 50.4 booked in April. 

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?

Haresh Menghani, Analyst at FXStreet explains: “From a technical perspective, nothing seems to have changed much for the pair and any subsequent recovery is more likely to confront a stiff resistance near the 1.2745-50 horizontal zone, above which the recovery could further get extended towards the 1.2800 handle. On the flip side, retracement back below the 1.2700 handle now seems to find decent support near the 1.2660-55 region, which if broken might turn the pair vulnerable to accelerate the slide back towards challenging the 1.2600 round figure mark.” 

Key Notes

UK: Services PMI likely to remain unchanged at 50.4 in May - TDS

GBP Futures: recovery looks exhausted

Fed speak amongst market movers today – Danske Bank

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.