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British Second  Estimate 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.

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

Published on Thursday at 9:30 GMT.

Indicator Background

British  Second Estimate  GDP is a key economic indicator, and provides an excellent indication of the health and direction of the British economy. It follows the release Preliminary GDP, which was released in December. Traders should pay close attention to the GDP release, as an unexpected reading could affect the direction of GBP/USD.

Preliminary  GDP in Q4 posted a gain of  0.5%,  matching the  forecast. No change is expected in Second Estimate  GDP, with  a forecast of  0.5%.

Sentiments and levels

The  US economy has slowed down in 2016,  but last week’s employment and inflation numbers beat expectations, so a March rate hike is again on the table.  This monetary divergence between the  Fed and the BOE is  bullish for the US dollar.

Technical levels, from top to bottom: 1.4227, 1.4135, 1.40, 1.3910, 1.3809  and 1.3667.

5 Scenarios

  1. 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.
  2. Above expectations: 0.9% to 1.3%: An unexpected higher reading can push the pair above one resistance line.
  3. 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.
  4. Below expectations: -0.3% to +0.1%: In this scenario, GBP/USD could drop below one support level.
  5. 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.

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