When is the UK GDP and how could it affect GBP/USD?
UK Q1 GDP Overview
The UK docket sees the Q1 2018 prelim GDP, which will be published later this session at 0830 GMT. The first estimate of the United Kingdom GDP growth is expected to decelerate to 0.3% in the first quarter of 2018. The annualized reading is also expected to show that the pace of expansion steadied at 1.4% in Q1.
Deviation impact on GBP/USD
Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined between 10 and 40 pips in deviations up to 2.5 to -2.5, although in some cases, if notable enough, a deviation can fuel movements of up to 70 pips.
How could affect GBP/USD?
The spot could take a further beating on a bigger-than-expected drop in the GDP figures and test the 1.3850 support zone. On an upside surprise, the GBP/USD pair is likely to attempt a tepid bounce towards the 1.395/70 resistance zone.
Technically, “the hourlies look a little heavy but the 4 hour momentum indicators are pointing a little higher, so as long as the 1.3900/1.3895 area holds, we could see a squeeze back towards 1.3940/50 and possibly up to 1.3950/70 ahead of 1.3995/1.4000, which capped it today. Above there could head towards 1.4025/30 although this looks unlikely to be seen again for a while. On the downside, a break of the mid-March lows at 1.3890 would target 1.3868/60 (76.4% of 1.3710/1.4376)/100 DMA, below which there is not too much to stop a run to 1.3800 and to 1.3770.,” Jim Langlands at FX Charts, writes.
Key Notes
UK: Focus on Q1 GDP – TDS
UK: Prelim GDP risks a temporary weather-related downside surprise in Q1 - Barclays
About the UK GDP
The Gross Domestic Product released by the Office for National Statistics (ONS) is a measure of the total value of all goods and services produced by the UK. The GDP is considered as a broad measure of the UK economic activity. Generally speaking, a rising trend has a positive effect on the GBP, while a falling trend is seen as negative (or bearish).