British Services PMI (Purchasing Managers’ Index) 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.
Update: UK Services PMI: 57.4
Here are all the details, and 5 possible outcomes for GBP/USD.
Published on Tuesday 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.
The index continues to post figures well above the 50 level, pointing to continuing expansion in the services sector. The June release rose to 58.5 points, above the estimate of 57.4 points. The markets are expecting another strong release for July, with an estimate of 58.1 points.
Sentiments and levels
With the US economy showing some strong numbers for Q2, speculation remains high that rates will rise, perhaps as early as September. British data has been respectable, helping the pound gain ground against the greenback. So, the overall sentiment is neutral on GBP/USD towards this release.
Technical levels, from top to bottom: 1.5909, 1.5769, 1.5682, 1.5590, 1.5485 and 1.5341.
5 Scenarios
- Within expectations: 55.0 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 64.0: An unexpected higher reading can send the pair above one resistance line.
- Well above expectations: Above 64.0: Such an outcome would likely prop up the pound, and a second resistance line might be broken as a result.
- Below expectations: 52.0 to 54.9: A lower reading than forecast could push GBP/USD downwards and break one level of support.
- Well below expectations: Below 52.0: A figure pointing to weak expansion or even contraction would likely push the pair downwards, possibly breaking a second support level.
For more about the pound, see the GBP/USD.
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