Search ForexCrunch

British  Revised Gross Domestic Product (GDP), published each quarter, measures the production and growth of the UK economy. Analysts consider GDP one the most important indicators of economic activity. A reading which is higher than the market forecast is bullish for the pound.

Here are all the details, and 5 possible outcomes for GBP/USD.

Published on Friday at 8:30 GMT.

Indicator Background

British  Revised GDP is a key economic indicator, and provides an excellent indication of the health and direction of the UK economy. Traders should pay particular attention to this economic indicator, as any unexpected reading could change the direction of GBP/USD.

The indicator has contracted for two consecutive releases, posting a  reading  of -0.3% in Q1. The markets are  predicting a 0.5% drop for  the Q3 release. Another  contraction in GDP would signify a sustained decline in UK economic activity,  and the pound  could drop as a result.  Will the indicator surprise the markets with a better reading than forecast?

Sentiments and levels

Thus, the overall sentiment is bullish on GBP/USD towards this release.

Technical levels, from top to bottom: 1.5750, 1.5648, 1.56, 1.5521, 1.5415 and 1.5361.

5 Scenarios

  1. Within expectations: -0.5% to 0.1%. In such a scenario, GBP/USD is likely to rise within range, with a small chance of breaking higher.
  2. Above expectations: 0.2% to 0.5%: An unexpected higher reading can send the pair above one resistance line.
  3. Well above expectations: Above 0.5%: A surge in GDP would push GBP/USD downwards, and a second resistance line might be broken as a result.
  4. Below expectations: -0.9% to -0.6%: A lower GDP figure than predicted could cause the pair to climb and drop below one support level.
  5. Well below expectations: Below -0.9%. In this scenario, GBP/USD could break a second level of support.

For more on the pound, see the GBP/USD forecast.