The British Services PMI (Purchasing Managers’ Index) is based on a survey of purchasing managers in the services sector. A reading which is higher than the market forecast is bullish for the pound.
Update: UK services PMI jumps to 58.9 points
Here are all the details, and 5 possible outcomes for GBP/USD.
Published on Tuesday 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 continues to trade well above the 50-point level, indicative of steady expansion in the services sector. The index came in at 56.7 points in February, shy of the forecast of 57.6 points. The estimate for the March report stands at 57.1 points.
Sentiments and levels
Despite a dismal job report out of the US late last week, the dollar managed to hold its own against the pound. This demonstrates that dollar sentiment remains strong against its major rivals, including the pound. If US releases bounce back this week, we could see the pound lose ground. So, the overall sentiment is bearish on GBP/USD towards this release.
Technical levels, from top to bottom: 1.5296, 1.5114, 1.5008, 1.4813, 1.4621 and 1.4521.
5 Scenarios
- Within expectations: 54.0 to 61.0: In such a case, GBP/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations:61.1 to 65.0: An unexpected higher reading could send the pair above one resistance line.
- Well above expectations: Above 65.1: The chances of a sharp expansion are low. Such an outcome could push the pound higher, and a second resistance line might be broken as a result.
- Below expectations: 50.0 to 53.9: A weaker reading than forecast could push GBP/USD downwards and break one level of support.
- Well below expectations: Below 50.0: A reading below the 50-point level would indicate contraction and could result in the pair breaking below a second support level.
For more about the pound, see the GBP/USD.
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