AUD/USD: Trading the Australian GDP Mar 2015

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. 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 00:30 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  for Q3  slipped to  0.3%, well short of the estimate of 0.7%.  The markets are expecting a strong improvement in the Q4 reading, with an estimate of 0.7%. Will the indicator meet or beat this prediction?

Sentiments and levels

With a host of Australian data this week, we can expect some movement from AUD/USD. If the RBA reduces rates as expected, we could see the Aussie lose ground. In the US, Fed chair Yellen tried to dampen expectations about a mid-rate hike in her Congressional testimony, but a strong NFP could boost the June rate expectations.. So, the overall sentiment is bearish on AUD/USD towards this release.

Technical levels, from top to bottom: 0.8150, 0.7978, 0.7904, 0.7799, 0.7601 and  0.7403.

5 Scenarios

1. Within expectations: 0.4% to 1.0%. In such a scenario, the AUD/USD is likely to rise within range, with a small chance of breaking higher.
2. Above expectations: 1.1% to 1.5%: An unexpected higher reading can send  the pair  above one resistance line.
3. Well above expectations: Above 1.5%: 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.
4. Below expectations: -0.1% to 0.3%:   A  weak GDP figure could cause the  pair to fall and break one level of support.
5. Well below expectations:  Below -0.1%. A contraction in GDP could see the pair drop below a second support level.

For more on AUD/USD, see the Australian dollar forecast.

To follow this event live:   [do action=”calendar-event” eventid=”ea62704e-57a4-4d22-856f-ad642047bdc7″/]