UK Q4 GDP Prelim expectations: Global markets are seeing the figures coming at 0.5%. What do key financial players anticipate? How will the release affect GBPUSD?
26 January, AtoZForex – Today, at 9:30 GMT the UK Office for National Statistics will release the first estimate of the country’s GDP. Market consensus stands at pessimistic 0.5%, where the previous reading came at 0.6%.
UK Q4 GDP Prelim expectations
The preliminary GDP figures are released every quarter. They reflect the change in the inflation-adjusted value of all goods and services produced by the economy in the UK. The upcoming report might surprise to the upside, according to market experts. There is a big chance that the reading will emerge at 0.6% on expectations that consumer spending would back the growth.
In case the data will appear in line with market expectations or better-than-anticipated, market experts see the upward shift in GBPUSD to six –week highs. Moreover, they believe in the optimistic scenario, the cable would test 1.27 resistance level.
In the opposite case, if the reading comes weaker-than-expected, cable might slide toward 1.2544 support. Analysts at TDS believe that the UK Q4 GDP figures will appear at 0.5% quarter-on-quarter. Yet, they consider a possible upside shift to 0.6%. The research team has commented:
“Despite the fall-off in December, retail sales still had a good quarter overall so we look for consumer spending to continue to support growth. And while we don’t look for much growth from the goods side of the economy, the drag from IP and construction should at least be smaller than in Q3. Any upside risk is coming more from the survey data than the hard data.”
Furthermore, analysts at Danske bank see today’s data coming at 0.5% in line with the market consensus:
“Q4 economic indicators such as the PMIs were solid in Q4 and the NIESR GDP estimate suggests GDP grew by 0.5% q/q, which is also our expectation (2.1% y/y). That said, a downward correction of the large increase in inventories in Q3 is a downside risk to our forecast.”
GBPUSD potential moves
Market analysts believe that the pair has passed the important resistance near 1.2535-40 region on Wednesday. Therefore, such movement suggests the near-term continuance of an upbeat trend towards 1.2700-10 resistance levels.
On the downside, 1.2625 level is now appearing as an immediate support. It is followed 1.2600 support point. In case GBPUSD will weaken below 1.2600 handle, the pair could further be headed towards a support of 1.2540-35 region.
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