Jakarta, GIC Trade – The January data report highlights a continued decline in services sector activity in the UK. The decline in services was driven by higher interest rates and low consumer confidence as key factors hampering business activity.
 
The UK services sector fell at its steepest pace in two years with a reading of 48.0, down from 49.9 in December.
 
While lower volumes of private sector activity are often associated with lower household incomes, in addition to greater risk aversion among corporate clients and the subsequent decline in business investment.
 
On the other hand, the UK manufacturing sector experienced growth in January 2023 with a reading of 46.7 compared to the forecast of only 45.4 from 45.3 in the previous period.
 
This data release is the diffusion rate based on the purchasing managers surveyed in the manufacturing and services industries. Numbers above 50 indicate expansion, while below 50 indicate contraction.
 
This data is a key indicator of economic health that reacts quickly to current market conditions and is relevant to the company's economic outlook.
 
Fundamentally, the report on the purchasing managers' index in the UK services and manufacturing sectors, which is still in a contraction phase, weighed on the pound sterling currency. Then how technically, see the following analysis:
 
Technical Analysis



GBP/USD is still in the price range of 1.23000 – 1.24000 after the release of data on business activity in the UK manufacturing and services sectors. However, seeing the MA20 line that has touched and crossed the MA50 line, further decline is potential, trying to test the support of 1.22877.
 
Where the support is a resistance in the previous pattern, which is the key reversal for the next move if it is successfully crossed towards the next support at 1.22030. The decline in the GBP/USD pair was also supported by higher lows (HL).
 
This Forex analysis is a fundamental and technical view used by the author, not a suggestion or a solicitation. To get more information click on the image below.