We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bearish
Oil - US Crude
Mixed
Wall Street
Bullish
Gold
Bearish
GBP/USD
Mixed
USD/JPY
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • The British Pound technical outlook still seems to favor the downside. GBP/CAD may pressure key rising support from August as GBP/AUD could prolong its downtrend. GBP/CHF may fall. Get your $GBP market update from @ddubrovskyFX here: https://t.co/hBOpDKXmfW https://t.co/AJlT2YKeCu
  • USD/JPY is approaching medium-term uptrend resistance and while the outlook remains constructive, the advance may be vulnerable near-term while below confluence resistance. Get your $USDJPY technical analysis from @MBForex here: https://t.co/93D7AyhHtG https://t.co/KQcLLrkMP3
  • AUD/USD has had the most impressive show of trend over the past couple of months with the pair gaining almost 1500 pips from the March low. Get your $AUDUSD technical analysis from @JStanleyFX here: https://t.co/vLz4Rpln3u https://t.co/AOwnJja5V8
  • Has the #Euro been saved? Find out from @CVecchioFX here: https://t.co/eiXfOTyGa6 https://t.co/AyRiYpb4cN
  • U.S. Market Analyst at https://t.co/JsVsSmefgR, Shain Vernier covers - ✔️ Safe haven assets in volatile markets ✔️ Central banks and governments ✔️ How will commodities trade in a recession Only on Trading Global Markets Decoded #podcast. Tune in here: https://t.co/1UmEzEbwiy https://t.co/ygwjGNvS61
  • The $USD, Euro, British Pound and Australian Dollar will all be at the mercy of political developments in Asia, Europe and North America this week. An avalanche of PMI data will set the backdrop. Find out from @ZabelinDimitri here: https://t.co/L8cfAgVx94 https://t.co/THWhPAS6AM
  • The price of #gold plunged 1% immediately after the stunning US jobs report crossed the wires. Get your market update from @RichDvorakFX here: https://t.co/8i0L6YIqjy https://t.co/y9dIXazJf9
  • S&P 500, Dow Jones, Nasdaq explode higher with stocks surging in response to shockingly better-than-expected monthly jobs data. Get your #equities market update from @RichDvorakFX here: https://t.co/nuMVWOzzuC https://t.co/M3nGBjd7kZ
  • The record-breaking NFPs increase behind us and the FOMC rate decision on Wednesday sets the tone for my trading video: 'Dow Soars Above 200-Day Average on NFPs, Will the #Fed Keep the Dollar Sliding' https://www.dailyfx.com/forex/video/daily_news_report/2020/06/06/Dow-Soars-Above-200-Day-Average-on-NFPs-Will-the-Fed-Keep-the-Dollar-Sliding.html?ref-author=Kicklighter&QPID=917719&CHID=9 https://t.co/kquvec5HVc
  • Seasonal factors, oversupply issues and the outbreak of COVID-19 has seen the price of liquefied #naturalgas (LNG) fall to 22-year lows (1.519), with the situation exacerbated by ‘fuller-than-normal’ storage facilities. Get your market update here:https://t.co/VOqfkBQ4aR https://t.co/OsaphmqEmu
GBP/USD- Trading the U.K. 1Q GDP Report

GBP/USD- Trading the U.K. 1Q GDP Report

2013-04-25 04:00:00
David Song, Strategist
Share:

Trading the News: U.K. Gross Domestic Product

What’s Expected:

Time of release: 04/25/2013 8:30 GMT, 4:30 EDT

Primary Pair Impact: GBPUSD

Expected: 0.1%

Previous: -0.3%

DailyFX Forecast: -0.1% to 0.2%

Why Is This Event Important:

The advance GDP report is expected to show the U.K. expanding 0.1% in the first-quarter, and the development may spark a bullish reaction in the British Pound as the region skirts a triple-dip recession. As the Bank of England (BoE) extends the Funding for Lending Scheme, a positive development should further dampen speculation for more quantitative easing, and we may see the Monetary Policy Committee start to discuss a tentative exit strategy later this year as they see a slow but sustainable recovery in Britain.

Recent Economic Developments

The Upside

Release

Expected

Actual

Jobless Claims Change (MAR)

0.0K

-7.0K

Industrial Production (MoM) (FEB)

0.4%

1.0%

Manufacturing Production (MoM) (FEB)

0.4%

0.8%

The Downside

Release

Expected

Actual

Retail Sales ex Auto Fuel (MoM) (MAR)

-0.6%

0.8%

Average Weekly Earnings ex Bonus (3MoY) (FEB)

1.2%

1.0%

Visible Trade Balance (FEB)

-8.600B

-9.416B

The ongoing improvement in the labor market along with the rebound in business outputs may produce a strong GDP figure for the U.K. and a marked rebound in the growth rate should increase the appeal of the British Pound as it dampens the BoE’s scope to expand the balance sheet further. However, the slowdown in private sector consumption paired with the weakening outlook for global trade may drag on the growth rate, and a dismal print may trigger a sharp selloff in the sterling as it fuels bets for additional monetary support. .

Potential Price Targets For The Release

Forex_GBPUSD-_Trading_the_U.K._1Q_GDP_Report_body_ScreenShot184.png, GBP/USD- Trading the U.K. 1Q GDP Report

We may see the GBPUSD make another run at the 1.5400 figure as the U.K. returns to growth, and the British Pound may continue to retrace the decline from earlier this year as the upward trending channel carried over from the previous month remains intact. However, a dismal GDP print may threaten the bullish setup in the pound-dollar, and the pair may work its way back towards the 61.8% Fibonacci retracement from the 2009 low to high around 1.4840-50 should the growth report fuel bets for more QE.

How To Trade This Event Risk

Trading the given event risk instills a bullish outlook for the sterling as the U.K. economy returns to growth, and an upbeat report may pave the way for a long British Pound trade as market participants scale back bets for more QE. Therefore, if the growth rate expands 0.1% or greater, we will need to see a green, five-minute candle subsequent to the release to generate a buy entry on two-lots of GBPUSD. Once these conditions are fulfilled, we will set the initial stop at the nearby swing low or a reasonable distance for the entry, and this risk will establish our first objective. The second target will be based on discretion, and we will move the stop on the second lot to cost once the first trade hits its mark in an effort to protect out gains.

In contrast, the slowdown in global trade paired with the ongoing slack in private sector activity may drag on the growth rate, and a dismal report is likely to dampen the appeal of the sterling as market participants ramp up bets for additional monetary support. As a result, if the U.K. slips back into recession, we will implement the same strategy for a short pound-dollar trade as the long position laid out above, just in the opposite direction.

Impact that U.K. GDP report has had on USD during the last quarter

Period

Data Released

Estimate

Actual

Pips Change

(1 Hour post event )

Pips Change

(End of Day post event)

4Q A 2012

01/25/2013 9:30 GMT

-0.1%

-0.3%

-40

-14

4Q 2012 Advanced U.K. GDP

Forex_GBPUSD-_Trading_the_U.K._1Q_GDP_Report_body_ScreenShot183.png, GBP/USD- Trading the U.K. 1Q GDP Report

The U.K. contracted 0.3% during the fourth quarter amid forecasts for a 0.1% decline, and the threat of a triple-dip recession may push the Bank of England to carry out its easing cycle throughout 2013 in an effort to encourage a stronger recovery.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com.

Follow me on Twitter at @DavidJSong

To be added to David's e-mail distribution list, please follow this link.

Risk management is key to successful trading. Use this App to help establish proper risk controls on your trades.

New to FX? Watch this Video

Questions? Comments? Join us in the DailyFX Forum

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.