Pound Falls as Services Sector Stagnates

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Pound Falls as Services Sector Stagnates
Pound Falls as Services Sector Stagnates

Pound Falls as Services Sector Stagnates

The British Pound fell by more than 70 points on Thursday as the Services sector remained stagnant for the previous month, which actually constitutes a huge chunk of the U.K economy. Investors always rely heavily on this economic indicator that is released in the first week of each month, which often gives an overall outlook of the economy to the investors that they carry along with them the whole month.

Last month’s construction, manufacturing, and services PMI were way better than expected hence it led to a massive gain in the GBP/USD pair the whole September. Currently the pair is trading at 1.6167 before the start of the London session; where a move below 1.6155 could take it down to test its critical support level of 1.6129 and 1.6112 while it must move above 1.6185 in order to test its resistance areas at 1.6200 and 1.6217.

Euro on Top

The EUR/USD remained in short range on Thursday where investors couldn’t figure out a clear trend due to the mixed nature of the economic indicators released yesterday. The services PMI of Italy and Spain both were mixed while later on the unemployment claims in the U.S increased lesser than expected but the non-manufacturing PMI couldn’t beat the forecasted figure.

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The pair is hovering at its top 1.3630 area where bulls are in control and could lift the pair further up to 1.3671 if it manages to sustain above 1.3636. Whereas, a move below its mild support area at 1.3602 could result in bearish correction so it would go on to test 1.3571 and 1.3553.

Gold

Gold is moving in a mixed pattern where it is just in a survival stage, as it is well above its critical support region of 1295. However, the metal is in range and would remain unattractive to trade if it does not move above 1245 resistance area or below 1295.

The most significant data release was due today of the U.S. Non-farm payrolls and the unemployment rate but that would not be released today as the government is facing a shutdown for now and is wary of releasing that crucial data at such a point in time. Markets are likely to remain in range amidst such circumstances as no clear indication is there regarding what is happening in the economy.

To contact the reporter of this story: Jonathan Millet at john@forexminute.com