How to trade the UK GDP report with GBP/USD
|- The first estimate of UK GDP for Q1 2018 is a major market mover that impacts the GBP/USD.
- The Market Impact Tool shows trading opportunities in both upside and downside surprises on this event.
- The pair moved, on average, 29 pips in the 15 minutes after the data release and 70 pips in the next 4 hours.
Buying GBP/USD Scenario
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Tradable Positive Trigger: +2.5 deviation [BUY Pair]
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Key Resistance Level: $1.4000
If it comes out at higher than expected with a deviation of +2.5 or higher, the pair may go up reaching a range of 53 pips in the first 15 minutes and 98 pips in the following 4 hours.
The round $1.4000 level capped the pair in mid-April and coincides with the 50-day Simple Moving Average. $1.4050 was a swing high in February and $1.4150 provided support to the pair in April.
Selling GBP/USD Scenario
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Tradable Negative Trigger: -2.5 deviation [SELL Pair]
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Key Support Level: $1.3920
If it comes out lower than expected at a deviation of -2.5 or less, the GBP/USD may go down reaching a range of 31 pips in the first 15 minutes and 66 pips in the following 4 hours.
$1.3920 provided support in late April. It is closely followed by $1.3890 which served as support in March. Next, down the line, we find $1.3850 and $1.3770.
GBP/USD Levels on the Chart
More data
In the last five releases, the GBP/USD moved, on average, 29 pips in the 15 minutes after the data release and 70 pips in the next 4 hours.
The previous release had no surprise in terms of deviation but nevertheless, the GBP/USD reached a 24 pip range in the first 15 minutes and a range of 51 pips 4 hours thereafter.
The UK economy lagged behind its peers in 2017 and the first estimate for the first quarter of the year provides an interesting insight into how the economy is doing with less than one year to Brexit. The economy is expected to grow at a quarterly rate of 0.4%, repeating the level from Q4 2017.
See UK Q1 GDP Preview: Even with GDP rising above potential, the growth rate is the lowest in G7
Follow the publication of the figure on the economic calendar. Watch out for the data from the Market Impact tool, projecting the potential price changes according to the deviation. Here is the Market Impact Studies Users Guide.
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