Australian GDP is the primary gauge of the production and growth of the economy. It is considered by analysts as one the most important indicators of economic activity, and a reading which is higher than expected is bullish for the Australian dollar.
Here are all the details, and 5 possible outcomes for AUD/USD.
Published on Wednesday at 1:30 GMT.
Indicator Background
Australian GDP is released on a quarterly basis, and provides an excellent indication of the health and size of the Australian economy. An unexpected reading can quickly affect the movement of AUD/USD.
GDP posted a gain of 0.6% in Q4, beating the estimate of 0.5%. The markets are expecting another gain of 0.6%. Will the indicator repeat and beat the estimate?
Sentiments and levels
In the US, a June rate hike isn’t likely, but a move in July is certainly an option. With the RBA hinting at a rate cut this summer, monetary policy favors the US dollar. So, the overall sentiment is bearish on AUD/USD towards this release.
Technical levels, from top to bottom: 0.7438, 0.7334, 0.7192, 0.7105, 0.7002 and 0.6875.
5 Scenarios
- Within expectations: 0.3% to 0.9%. In such a scenario, the AUD/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 1.0% to 1.4%: An unexpected higher reading can send the pair above one resistance line.
- Well above expectations: Above 1.4%: The chances of such a scenario are low. Such an outcome could push AUD/USD upwards, and a second resistance line might be broken as a result.
- Below expectations: -0.2% to +0.2%: A weak reading could push AUD/USD below one support line.
- Well below expectations: Below -0.2%. In this scenario, we could see the pair drop below a second support level.
For more on AUD/USD, see the Australian dollar forecast.
Share
