GBP/USD: UK’s services sector growth slowed in May


GBPUSD Movement

For the 24 hours to 23:00 GMT, the GBP rose 0.29% against the USD and closed at 1.2906.

Macroeconomic data showed that growth in UK’s dominant service sector slowed more than expected in May as political uncertainty ahead of this week’s general election and rising consumer prices weighed on the sentiment. The nation’s services PMI fell to a three-month low of 53.8 in May from 55.8 reported last month. Investors had expected the index to fall to a level of 55.0.

Meanwhile, the latest opinion poll showed that the Conservative Party would win only 305 seats in the House of Commons, above Labour’s 268 but well short of the 326 seats required for a majority.

Overnight data indicated that UK BRC like-for-like retail sales dropped by 0.4% YoY in May, from a rise of 5.6% reported last month, suggesting that the British consumers are feeling the strain from rising inflation and cutting their spending on discretionary items.

In the Asian session, at GMT0300, the pair is trading at 1.2919, with the GBP trading 0.10% higher from yesterday’s close.

The pair is expected to find support at 1.2872, and a fall through could take it to the next support level of 1.2826. The pair is expected to find its first resistance at 1.2953, and a rise through could take it to the next resistance level of 1.2988.

Amid no economic release in the UK today, market participants will look forward to global macroeconomic events for further direction in the Pound.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

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