Search ForexCrunch

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

  1. 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.
  2. Above expectations: 1.2% to 1.6%: An unexpected higher reading can push the pair above one resistance line.
  3. 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.
  4. Below expectations: -0.1% to 0.3%: In this scenario, GBP/USD could drop below one support level.
  5. 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 forecast.