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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 at10:30 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 sumer, 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

  1. 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.
  2. Above expectations: 1.0% to 1.4%: An unexpected higher reading can send  the pair  above one resistance line.
  3. 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.
  4. Below expectations: -0.2% to +0.2%:   A  weak reading  could push AUD/USD below one  support line.
  5. 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.