The Gross Domestic Product growth rate of a country is another highly anticipated event on the economic calendar such as Non-Farm Payrolls. GDP growth looks specifically at changes in growth patterns by adding household consumption, government spending, domestic investment’s, and net exports for a country. As growth increases it is assumed there will be a high demand for a nation’s currency. This is due to the likelihood of inflationary pressures in the market place, with central banks looking to potentially change monetary policy due to these results.
![](https://media.dailyfx.com/illustrations/2012/03/23/Breakout_Entries_Primed_for_UK_GDP_Release_body_United_Kingdom_GDP_Growth_Rate.png)
As the most important growth figure for a nation, GDP is tracked on a nation by nation basis. The next GDP announcement for the UK is set to take place next Wednesday March 28th at 4:30am New York time. As with any news event, numbers released outside of the predicted values can bring volatility and increase the likely hood of a breakout. This month GBP GDP (QoQ) is expected to be released at -.2%. Expectations are already set for negative growth; any further decline could cause a severe reaction on the British Pound.
Below we can view the current 4Hour chart of the GBP/USD. A triangle patter is forming by connecting highs starting with the February 29th high at 1.5991. Ascending support is created by connecting a series of wicks beginning with the March 12th low at 1.5601. Expecting active markets around the timing of the news event, we can begin planning for a breakout. Entries can be set below for support in expectations of prices moving lower on bad GDP data. Conversely, GBP/USD bulls can place orders above resistance in the event of better than expected data.
![](https://media.dailyfx.com/illustrations/2012/03/23/Breakout_Entries_Primed_for_UK_GDP_Release_body_Picture_1.png)
My preference is to set entries to sell the GBP/USD under 1.5800. Stops should be placed above resistance near 1.5865. Limits should first target 1.5680 for a clear 1:2 Risk/Reward ratio. Secondary targets can be placed under 1.5600 on an extension of downward momentum.
---Written by Walker England, Trading Instructor
To contact Walker, email instructor@dailyfx.com. Follow me on Twitter at @WEnglandFX.
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