UK Preliminary GDP, published each quarter, is the first of three GDP releases. GDP measures production and growth of the economy, and is considered by analysts one the most important indicators of economic activity. A reading which is better than the market forecast is bullish for the pound.
Here are all the details, and 5 possible outcomes for GBP/USD.
Published on Thursday at 9:30 GMT.
Indicator Background
British Preliminary GDP is a key economic indicator, and provides an excellent indication of the health and direction of the British economy. Traders should pay close attention to the GDP release, as an unexpected reading could affect the direction of GBP/USD.
Final GDP in Q3 posted a strong gain of 0.6%, edging above the forecast of 0.5%. Preliminary GDP for Q1 is expected at 0.5%.
Sentiments and levels
There is apprehension in the markets as Donald Trump’s economic policies remain unclear. Over in the UK, the Supreme Court ruled that the government needs parliamentary approval to trigger Brexit. This could weigh on the pound. So, the overall sentiment is bullish on GBP/USD towards this release.
Technical levels, from top to bottom: 1.2775, 1.2674, 1.2512, 1.2311 and 1.2201
5 Scenarios
- Within expectations: 0.2% to 0.8%. In such a scenario, GBP/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 0.9% to 1.3%: An unexpected higher reading can push the pair above one resistance line.
- Well above expectations: Above 1.3%: A surge in the reading could push the pound higher and break a second line of resistance as a result.
- Below expectations: -0.3% to 0.1%: If GDP contracts, GBP/USD could drop below one support level.
- Well below expectations: Below -0.3%. A very weak reading could hurt the pound, and the pair could fall below a second level of support.
For more on the pound, see the GBP/USD.