When are the UK data releases and how could they affect GBP/USD?

The UK Economic Data Overview

The UK docket has the monthly GDP release today, alongside the trade balance and industrial production, all of which will be published later this session at 0830 GMT.

The United Kingdom GDP is seen rebounding by 0.3% in May after a 0.4% drop reported in the month of April.

Meanwhile, the manufacturing production, which makes up around 80% of total industrial production, is expected to show m/m growth of 2.1% in May, up from a drop of 3.9% recorded in April. The total industrial production is expected to come in at +1.5% m/m in May as compared to the previous reading of -2.7%.

On an annualized basis, the industrial production for May is expected to have risen 1.1% versus -1.0% previous, while the manufacturing output is also anticipated to have increased 1.0% in the reported month versus -0.8% last.

Separately, the UK goods trade balance will be reported at the same time and is expected to show a deficit of £-12.550 billion in May vs. £-12.113 billion deficit reported in April.

Deviation impact on GBP/USD

Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined around 20-pips in deviations up to + or -2, although in some cases, if notable enough, a deviation can fuel movements in excess of 60-70 pips.

How could affect GBP/USD?

The downbeat UK GDP figures could offer a fresh boost to the GBP bears that could risk a break below the 1.24 handle.

Haresh Menghani, FXStreet’s Analyst notes: “The pair has been trending lower along a short-term descending trend-channel formation on the daily chart. The lower end of the mentioned channel - around the 1.2400-1.2395 region, coincides with early-January swing lows and should act as a key pivotal point for the pair's next leg of a directional move. Below the mentioned support, April 2017 lows support - around the 1.2365 region will be in focus before the pair eventually drops to test the 1.2300 round figure mark.”

“On the flip side, any attempted recovery now seems to confront fresh supply near the key 1.2500 psychological mark, which is followed by resistance near the 1.2535-40 region.,” Haresh adds.

Key Notes

UK: GDP likely to gain 0.5% in May - TDS

GBP Futures: rising odds for further losses

Forex Today: All eyes on Powell, trade talks resume

About the UK Economic Data

The Gross Domestic Product released by the Office for National Statistics (ONS) is a measure of the total value of all goods and services produced by the UK. The GDP is considered as a broad measure of the UK economic activity. Generally speaking, a rising trend has a positive effect on the GBP, while a falling trend is seen as negative (or bearish).

The Manufacturing Production released by the Office for National Statistics (ONS) measures the manufacturing output. Manufacturing Production is significant as a short-term indicator of the strength of UK manufacturing activity that dominates a large part of total GDP. A high reading is seen as positive (or bullish) for the GBP, while a low reading is seen as negative (or bearish).

The trade balance released by the Office for National Statistics (ONS) is a balance between exports and imports of goods. A positive value shows trade surplus, while a negative value shows trade deficit. It is an event that generates some volatility for the GBP.