British Second 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.
Indicator Background
British Preliminary GDP is a key economic indicator, and provides an excellent indication of the health and direction of the British economy. It follows Preliminary GDP, which was released in October. Traders should pay close attention to the GDP release, as an unexpected reading could affect the direction of GBP/USD.
Preliminary GDP in Q3 posted a gain of 0.5%, close to forecast of 0.6%. Little change is expected from Second Estimate GDP, which stands at 0.5%.
Sentiments and levels
The guessing game over the Fed’s plans continues, as many analysts are predicting the Fed will make a rate move in December. BOE head Mark Carney stated that interest rates will remain low, which could weigh on the pound, which is struggling to stay above the symbolic 1.50 line. So, the overall sentiment is bearish on GBP/USD towards this release.
Technical levels, from top to bottom: 1.5341, 1.5269, 1.5163, 1.5026, 1.4856 and 1.4752.
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 GDP would push the pound higher and the pair could break a second line of resistance as a result.
Below expectations: -0.3% to +0.1%: In this scenario, 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.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.
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