British Preliminary GDP, one of the most important economic releases, is published each quarter. GDP measures production and growth of the economy, and is considered by analysts as one the most important indicators of economic activity. A reading which is better than the market forecast is bullish for the pound.
Update: UK GDP disappoints with 0.5% – GBP slides
Here are all the details, and 5 possible outcomes for GBP/USD.
Published on Tuesday 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 Q2 posted a gain of 0.7%, matching the forecast. The estimate for Preliminary GDP in Q3 stands at 0.6%.
Sentiments and levels
The US may be moving away from a rate hike in 2015, but monetary divergence continues to favor the dollar over the pound. The US economy remains stronger than that of the UK, and weak global conditions may lead to more investors seeking safety with the US dollar at the expense of the British pound. So, the overall sentiment is bearish on GBP/USD towards this release.
Technical levels, from top to bottom: 1.5682, 1.5590, 1.5485, 1.5341, 1.5269 and 1.5163.
5 Scenarios
- Within expectations: 0.4% to 1.1%. In such a scenario, GBP/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 1.2% to 1.6%: An unexpected higher reading can push the pair above one resistance line.
- Well above expectations: Above 1.6%: A surge in the reading would push the pound higher and the pair could break a second line of resistance as a result.
- Below expectations: -0.1% to 0.3%: In this scenario, GBP/USD could drop below one support level.
- Well below expectations: Below -0.1%. 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.