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.
Opinions are the authors — not necessarily OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Recommended Content
Editors’ Picks
USD/JPY flat-lines below 151.50 after soft Japanese CPI data
USD/JPY stays defensive below 151.50 after the release of a soft Japan's CPI report and mixed Industrial Production and Retail Sales data on Friday. Japanese verbal intervention also weighs on the pair amid the holiday-thinned conditions on Good Friday. US PCE inflation awaited.
AUD/USD buyers lack vigor above 0.6500 amid Good Friday trading lull
AUD/USD is trading listlessly above 0.6500 in the Asian session amid light trading on Good Friday. The Aussie pair shrugs off encouraging comments from China's FX regulator, as price action remains subdued ahead of the US PCE inflation data.
Gold flirts with record highs above $2,230, all eyes on US PCE data
Gold price flirts with record highs around $2,230 during the Asian session on Friday. The uptick of yellow metal is bolstered by the safe-haven flows amidst growing economic concerns and the prospect of interest rate cuts from the US Federal Reserve.
Ripple's move above this key level could trigger nearly 50% rally for XRP
Ripple price has overcome a critical resistance level and flipped into a support floor on the weekly time frame. This development happened while XRP tightly consolidated for roughly 250 days. As this coiling up comes undone, investors can expect XRP to kickstart a massive rally.
Will they won’t they cut rates is the question of Q2?
There has been some significant push back from Fed and Bank of England members around the timing of rate cuts, and the Bank of Japan still haven’t physically intervened in the FX market to stem yen weakness although they are threatening to do so.