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.
Here are all the details, and 5 possible outcomes for GBP/USD.
Published on Tuesday at 8:30 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.
Preliminary GDP is the earliest of the three GDP reports and tends to have the most impact. The Final GDP reading for Q1 came in at 0.4%, matching the forecast. The estimate for Preliminary GDP in the Q2 report stands at 0.3%.
Sentiments and levels
Last week’s strong housing and job numbers have increased speculation about a rate hike by the Fed, perhaps as early as September. All eyes will be on the Fed policy statement later this week, as any hints about a rate hike could help the US dollar rally even higher against the pound. So, the overall sentiment is bearish on GBP/USD towards this release.
Technical levels, from top to bottom: 1.5769, 1.5682, 1.5590, 1.5485, 1.5341, and 1.5269.
5 Scenarios
- Within expectations: 0.0% to 0.6%. In such a scenario, GBP/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 0.7% to 1.0%: An unexpected higher reading can push the pair above one resistance line.
- Well above expectations: Above 1.0%: 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: -0.4% to -0.1%: In this scenario, GBP/USD could drop below one support level.
- Well below expectations: Below -0.4%. A sharp contraction could hurt the pound, and the pair could fall below a second level of support.
For more on the pound, see the GBP/USD.
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