UK services PMI preview: What to expect of GBP/USD?

By FXStreet FXStreet (Mumbai) – The GBP/USD pair once again ran into offers as it neared 1.4445 levels and now trades below 1.44 levels. The immediate focus is on the all important UK services PMI figure for January. The data is a big market mover and rightfully so since the service sector is the largest contributor to UK GDP.

Sterling could be buoyed by better-than-expected PMI

The UK January services PMI index is expected to come-in at 55.3; which is slightly lower than the December’s reading of 55.5. Moreover, the December reading was weaker-than-expected and was mainly hurt by the drop in the new business growth. The employment growth had slowed down as well.

The first move in the GBP is likely to be driven by the headline number. The details may receive market attention later, especially since BOE quarterly inflation report is due tomorrow. A weaker headline figure, coupled with dismal sub indices could provide more space for the BOE to come out dovish tomorrow. Hence, Sterling could take a beating and may take out critical support at 1.4351 (23.6% of 1.5230-1.4079).

On the other hand, a better-than-expected figure would be good news and could see the pair finally chew …read more

Source:: FX Street