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 improved in Q4, posting a gain of 0.5%, which was within expectations. Little change is expected in the Q1 report, with an estimate of 0.6%.
Sentiments and levels
The sagging Australian dollar has given up about 400 points in the past two weeks, despite lukewarm US data. Sharp divergence in monetary stance between the Fed and the RBA continues to weigh on the pair and the symbolic US 75 cent line is within striking distance. So, the overall sentiment is bearish on AUD/USD towards this release.
Technical levels, from top to bottom: 0.7901, 0.7799, 0.7692, 0.7601, 0.7528 and 0.7403.
5 Scenarios
- Within expectations: 0.2% to 0.8%. In such a scenario, the AUD/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 0.9% to 1.3%: An unexpected higher reading can send the pair above one resistance line.
- Well above expectations: Above 1.3%: 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 0.1%: A weak reading could push AUD/USD below one resistance 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.
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