Never miss a story from David Song

Subscribe to receive daily updates on publications
Please enter valid First Name
Please fill out this field.
Please enter valid Last Name
Please fill out this field.
Please enter valid email
Please fill out this field.
Please select a country

I’d like to receive information from DailyFX and IG about trading opportunities and their products and services via email.

Please fill out this field.

Your Forecast Is Headed to Your Inbox

But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk.

Your demo is preloaded with £10,000 virtual funds, which you can use to trade over 10,000 live global markets.

We'll email you login details shortly.

Learn More about Your Demo

You are subscribed to David Song

You can manage your subscriptions by following the link in the footer of each email you will receive

An error occurred submitting your form.
Please try again later.

Trading the News: U.K. Gross Domestic Product (GDP)

Updates to the U.K. Gross Domestic Product (GDP) report may spark a near-term rebound in GBP/USD as the growth rate is expected to increase 1.8% after expanding 1.4% per annum during the last three-months of 2018.

Image of DailyFX economic calendar

Signs of a resilient economy may push the Bank of England (BoE) to further embark on its hiking-cycle as ‘the Committee continues to judge that, were the economy to develop broadly in line with its Inflation Reportprojections, an ongoing tightening of monetary policy over the forecast period, at a gradual pace and to a limited extent, would be appropriate to return inflation sustainably to the 2% target at a conventional horizon.

In turn, a GDP reading of 1.8% or higher may spark a bullish reaction in the British Pound as it boosts bets for a BoE rate-hike, but a below-forecast print may keep GBP/USD under pressure as it puts pressure on Governor Mark Carney and Co. to drop the hawkish forward-guidance for monetary policy.

Impact that the U.K. GDP report had on GBP/USD during the previous release


Data Released



Pips Change

(1 Hour post event )

Pips Change

(End of Day post event)

4Q P


02/11/2019 09:30:00 GMT





4Q 2018 U.K. Gross Domestic Product (GDP)

GBP/USD 15-Minute Chart

Image of gbpusd 15-minute chart

The U.K. economy grew 1.3% during the last three-months of 2018 after expanding 1.5% during the previous period, with the gauge for Private Consumption increasing 0.4% for the second consecutive quarter. A deeper look at the report showed business investments contracting 1.4% to mark the biggest decline since 2016, while Government Spending climbed 1.4% in the four-quarter amid forecasts for a 0.5% rise.

The British Pound struggled to hold its ground following the below-forecast GDP print, with GBP/USD slipping below the 1.2900 handle to close the day at 1.2853. Learn more with the DailyFX Advanced Guide for Trading the News.

GBP/USD Rate Daily Chart

Image of gbpusd daily chart
  • Keep in mind that the broader outlook for GBP/USD is no longer constructive as both price and the Relative Strength Index (RSI) snap the upward trend from late last year after failing to close above the Fibonacci overlap around 1.3310 (100% expansion) to 1.3370 (78.6% expansion).
  • It seems as though former channel-support is offering resistance as GBP/USD stages a failed attempt to test the April-high (1.3196), with a break/close below the 1.2950 (23.6% retracement) to 1.3000 (61.8% retracement) region opening up the Fibonacci overlap around 1.2880 (50% retracement) to 1.2890 (23.6% expansion), which largely lines up with the April-low (1.2866).

Additional Trading Resources

New to the currency market? Want a better understanding of the different approaches for trading? Start by downloading and reviewing the DailyFX Beginners Guide.

Are you looking to improve your trading approach? Review the ‘Traits of a Successful Trader series on how to effectively use leverage along with other best practices that any trader can follow.

--- Written by David Song, Currency Strategist

Follow me on Twitter at @DavidJSong.