Expectations are very low for Australia’s Q1 GDP: a first contraction of the economy in over two years. This broad measure of the economy will rock the Aussie on any result. Here are the details and 5 expected outcomes for AUD/USD. Published on Wednesday at 1:30 GMT. Indicator Background Australia’s economy never went into a recession after the financial crisis broke out in the fall of 2008. Australia encountered only one quarter of contraction, in Q4 2008, and immediately returned to growth, sooner than other advanced economies. This is expected to change in the first quarter of 2011. The main reason for a squeeze is the natural disaster in Queensland. The floods that hit wide areas lasted for a long time and significantly hurt economic activity. Evidence of a slowdown was seen in the housing sector, that saw significant squeezes. Weakness was also seen in the unofficial PMI-like figures from AIG – their score was lower than 50, for most sectors almost all the time. The slowdown of China, which has also seen lower manufacturing PMIs during this quarter also add to the fears. China is Australia’s main trade partner. The current consensus is for a contraction (or negative growth if you wish), of 0.3%. There are whispers for a significantly lower figure though. Sentiment and Levels Contrary to the low expectations, the sentiment is currently positive for the Aussie: the fresh hopes for Greece push the US dollar lower across the board, and are likely to continue. Technical levels from top to bottom: 1.1021, 1.0935, 1.0850, 1.0775, 1.07, 1.0580, 1.05, and 1.0440. 5 Scenarios Within expectations: -0.3% to -0.6%: In this scenario, the pair is likely to shake quite a bit, but not break below support or above resistance. Above expectations: -0.2% to 0%: A smaller contraction that expected and much smaller than whispered will boost the Aussie and can send the pair above one resistance level. Well above expectations: +0.1% or higher: No contraction whatsoever will be very good news for Australia and will show the immense strength of the Australian economy. A break above two levels of resistance is possible. Below expectations: -0.7% to -0.9%: A significant contraction, at the feared numbers will be bad news for Australia. A drop below support is likely in this case. Well below expectations: -1% or worse: Significant contraction can send the pair to break below one level of support and to challenge another one. For more on the Australian dollar, see the AUD/USD forecast. Yohay Elam Yohay Elam Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts. Yohay's Google Profile View All Post By Yohay Elam Opinions share Read Next USD/CAD Dives To Support on Hawkish Outlook by the BOC Yohay Elam 11 years Expectations are very low for Australia's Q1 GDP: a first contraction of the economy in over two years. This broad measure of the economy will rock the Aussie on any result. Here are the details and 5 expected outcomes for AUD/USD. Published on Wednesday at 1:30 GMT. Indicator Background Australia's economy never went into a recession after the financial crisis broke out in the fall of 2008. Australia encountered only one quarter of contraction, in Q4 2008, and immediately returned to growth, sooner than other advanced economies. This is expected to change in the first quarter of 2011. The main… Regulated Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk.2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk.3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk.4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk.5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.