When is UK GDP and how could it affect GBP/USD?

UK prelim Q1 GDP Overview

The UK docket has the preliminary Q1 GDP report, which will be published later this session at 8.30GMT. The first estimate of the United Kingdom GDP is expected to decelerate to 0.4% in the first quarter, against 0.7% growth seen in Q4. The annualized reading is also expected to show that the pace of expansion has increased to 2.2% in Q1 versus 1.9% previous.

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 beating on a softer GDP print and test 1.28 handle, as investors would take profits off the table after the recent upsurge. On an upside surprise, the GBP/USD pair is likely to rally hard in a bid to conquer 1.30 handle, extending the ongoing unwinding of GBP shorts.

Technically, a break above 1.2916 (6-month highs) could lift the pair above 1.2950 (psychological levels), beyond which a test of 1.2948 (flash crash high) is imminent. Conversely, a break below 1.2859 (5-DMA), leading to a subsequent break below 1.2836 (10-DMA) is likely to drag the pair towards testing its next support near 1.2800 (round figure).

Key notes

UK: GDP to decelerate from 0.7% q/q in Q4 to only 0.4% q/q in Q1 - TDS

GBP/USD Forecast: likely to extend the bullish momentum on GDP figures (UK, US)

About UK prelim GDP

The Gross Domestic Product released by the National Statistics 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).