UK Revised GDP (quarter-on-quarter) q/q is the second GDP release for the Q1 of 2014. Due to the nature of these GDP releases, the market will react strongly to any sharp surprises, and considering how much the market has been supporting the GBP, if the release were to miss expectation, a sell-off is almost guaranteed. However, if the opposite is true, expect more support on the GBP.
4:30am (NY Time) UK Revised GDP q/q Forecast 0.8% Previous 0.8%
DEVIATION: 0.3% (BUY GBP 1.1% / SELL GBP 0.5%)
The Trade Plan
Since this is the second release of the first quarterly GDP for 2014 (Q1 2014), we´re likely to get plenty of reaction if we get a surprise, as most second releases do still have the potential of surprising the market. Considering the recent positive trend in the UK economic data, we may get another surprise release.
However, we´ll still be looking to trade the release using our after news retracement method. Our surprise factor is around 0.3% as we´ll look to possibly SELL GBP at 0.5% or worse, and BUY GBP at 1.1% or better.
I’d recommend to use the Recommended Pairs from above as they are based on my CSM, which should provide the best combination of currency pairs to trade based on better/worse news… of course, you can also trade the default pair: GBP/USD.
Outlook Score
Outlook Score is derived from market sentiment, focus, and economic indicators for the currency. It represents the long-term trend of the currency and its market perception. In short, a strong Outlook Score means more long-term demand for the currency, and a weak Outlook Score is the opposite.
Definition
UK Revised GDP q/q, is defined as “the market value of all final goods and services produced within a country in a given period of time. It is also considered the sum of value added at every stage of production of all final goods and services produced within a country in a given period of time.” GDP is basically the direct measurement of the economy, and a stronger GDP means that the central bank will more likely raise interest rate as a stronger economy usually brings higher inflationary pressure.