After the RBA left rates unchanged at record lows, monetary policy to remain accommodative, today’s data has just arrived in the form of Gross Domestic Product as follows…
- AUSTRALIA Q1 REAL GDP -0.3 PCT QTR/QTR, S/ADJ (REUTERS POLL -0.3 PCT)
- 02-Jun-2020 19:30:01 – AUSTRALIA Q1 REAL GDP +1.4 PCT YR/YR, S/ADJ (REUTERS POLL +1.4 PCT)
- 02-Jun-2020 19:30:01 – AUSTRALIA Q1 FINAL CONSUMPTION EXPENDITURE -0.4 PCT, S/ADJ
- 02-Jun-2020 19:30:01 – AUSTRALIA Q1 GROSS FIXED CAPITAL EXPENDITURE -0.8 PCT, S/ADJ
- 02-Jun-2020 19:30:01 – AUSTRALIA Q1 CHAIN PRICE INDEX +1.1 PCT
more to come…
Description of Gross Domestic Product
The Gross Domestic Product released by the Australian Bureau of Statistics is a measure of the total value of all goods and services produced by Australia. The GDP is considered as a broad measure of the economic activity and health. A rising trend has a positive effect on the AUD, while a falling trend is seen as negative (or bearish) for the AUD.
So what now?
AUD has rallied to fresh highs in the Asia session, extending NY gains.
Westpac pointed out a number of bullish inputs for the currency which included, global equities, iron ore above $100/tonne, a current account surplus for a full year, outperformance on Covid-19 containment and RBA comfortable with current policy settings.
AUD/USD levels
However, as discussed here, the currency has returned to where markets agreed on prices for the whole of H2 2019. It is going to take a systemic shift in the markets for AUD to catch a bullish extension at this juncture. USD could well be ripe for an upside correction, as per the following analysis:
- DXY Price Analysis: Bulls looking left for structure, target prior lows, a 61.8% retracement
As for the Aussie chart, failures to back below the long term trend line, bears could target a 61.8% retracement of the prior impulse to the previous resistance structure. On the other hand, if the trend line holds, is blue skies from here for a new cyclical bull trend. The RBA could well be the best bet in town, especially if the `federal Reserve has no choice but to go harder to save its economy from collapse.
Chart to follow…
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