British Second Estimate GDP, one of the most important economic releases, is published each quarter. GDP measures production and growth of the economy, and is considered by analysts as one the most important indicators of economic activity. A reading which is better than the market forecast is bullish for the pound.

Here are all the details, and 5 possible outcomes for GBP/USD.

Published on Friday at 9:30 GMT.

Indicator Background

British Second Estimate GDP is a key economic indicator, and provides an excellent indication of the health and direction of the British economy. It follows the release Preliminary GDP, which was released in October. Traders should pay close attention to the GDP release, as an unexpected reading could affect the direction of GBP/USD.

Preliminary GDP in Q3 posted a gain of 0.5%, beating the estimate of 0.3%. No change is expected in Second Estimate GDP, with an identical forecast of 0.5%.

Sentiments and levels

The US dollar continues to roll since the US election and with the Fed expected to raise rates in December, sentiment towards the greenback is very favorable. At the same time, the markets remain jittery about the effects that Brexit will have on the British economy, and this was underscored by the Autumn Statement, which downgraded GDP for 2017. So, the overall sentiment is bearish on GBP/USD towards this release.

Technical levels, from top to bottom: 1.2778, 1.2612, 1.2448, 1.2272, 1.2143 and 1.1943

5 Scenarios

1. Within expectations: 0.2% to 0.8%. In such a scenario, GBP/USD is likely to rise within range, with a small chance of breaking higher.
2. Above expectations: 0.9% to 1.3%: An unexpected higher reading can push the pair above one resistance line.
3. Well above expectations: Above 1.3%: A surge in GDP would push the pound higher and the pair could break a second line of resistance as a result.
4. Below expectations: -0.3% to +0.1%: In this scenario, GBP/USD could drop below one support level.
5. Well below expectations: Below -0.3%. A very weak reading could hurt the pound, and the pair could fall below a second level of support.