A GDP Day – UK GDP Up Next, Will We See 1.30 Today?
Skerdian Meta • 2 min read
Today is an important day for growth in the English speaking world. We start with the UK GDP report shortly, which is followed by US and Canadian GDP figures at 13:30 GMT. Let´s start with UK GDP and GBP.
The UK economy is expected to have grown by 0.4% in Q1 (first quarter) 2017, which is not great, but it´s still good considering the Brexit process.
The UK impressed analysts in January when the last GDP report showed that the UK economy grew last quarter of 2016, because most were expecting a contraction due to Brexit. But, real Brexit hasn´t started yet, as I have often mentioned before, so it will take time until it really affects the real economy.
However, the market seemed impressed, so it will be impressed this time even if we see a 0.5% expansion. Anything bigger than that and I´m positive we we´ll see GBP/USD break above 1.30 today.
But I doubt we will see 0.6% this time. So, if the number is 0.4% as expected I see a shakeup in GBP pairs and GBP/USD might even reach 1.30.
That would be the perfect scenario for a long term sell forex signal targeting 200-300 pips, or even more, if momentum picks up.
1.30 is not too far and we´re above the 50 SMA (yellow) already
I don´t see this as the end of the uptrend by the way, at least not until the UK elections, but we could witness a retracement soon. After all, all timeframe charts up to weekly are severely oversold.
If GDP numbers disappoint, then the forex market might get scared that Brexit jitters are catching up. You don´t need to be a genius to figure out what will happen to GBP after, so sell at will. Although, you have to place a somewhat large stop loss due to volatility in the first minutes after the release.