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GPB/USD forex signal - Markit Services PMI - 05 Apr 2018

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The UK's services PMI data will be released today at 08:30 GMT by Markit. According to the economists polled, services activity in the UK is expected to rise to 53.9 for the month of March. This marks a slower pace of increase in business activity in the UK compared to February's print of 54.5.

The services PMI data comes following yesterday's construction services report. According to Markit, the UK's construction activity was seen falling into contraction territory, below the 50-level index to 47.0. This was the first contraction in the construction sector since the past six months. However, Markit attributed the decline in the construction sector to snow.

Coming back to today's services PMI report, given the fact that the services sector has been one of the strongest contributors to the nation's GDP report; a weaker than expected print could potentially reflect in a weaker pace of growth during the first month of the second quarter.

This could also possibly weaken the sentiment in the markets especially when it comes to the UK's interest rates. Currently, investors are speculating that the Bank of England will hike rates a second time in May. Interest rates in the UK are expected to rise to 0.75% in May, marking a second rate hike in over a decade and since the UK voted to leave the EU.

Based on the above, today's forex trading signal is GBPUSD. The currency pair managed to hold on to some gains on the day despite a weaker construction PMI report. With support strongly being established at 1.4060, we expect the upside to prevail.

Therefore, we are looking to long GBPUSD with entry at 1.4066 where temporary support is established. To the upside, GBPUSD will be targeting the resistance level at 1.4116 with stops at 1.4034 as we expect to see GBPUSD closing higher on the day.

forex signal gbpusd 05 apr 2018

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion. All risks and coasts associated with online trading are your responsibility.