Australian GDP provides a broad measurement 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 the forecast 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 quarterly and is an excellent gauge of the health and size of the economy in the past quarter. Thus, publication of Australian GDP may have a significant impact on AUD/USD.
The GDP reading in Q1 was 0.6%, falling short of the estimate of a 0.8% gain. The markets are expecting an identical gain in Q2. If GDP again falls short of the estimate, we could see the Aussie lose some ground.
Sentiments and levels
AUD/USD posted more losses last week and the downward trend could continue. The RBA has clearly indicated that it wants a weaker Australian dollar, and the currency could fall if key Australian releases do not impress. Meanwhile, the US Federal Reserve could taper QE as early as September and continuing market speculation about this has been bullish for the US dollar. So, the overall sentiment is bearish on AUD/USD towards this release.
Technical levels, from top to bottom: 0.9180, 0.9041, 0.90, 0.8893, 0.8747 and 0.8568.
5 Scenarios
- 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.
- Above expectations: 1.0% to 1.4%: An unexpected higher reading can send the pair well above one resistance line.
- Well above expectations: Above 1.4%: The chances of such a scenario are low. Such an outcome would push AUD/USD upwards, and a second resistance line might be broken as a result.
- Below expectations: -0.2% to 0.2%: A weak GDP figure could cause the pair to fall and break one level of support.
- Well below expectations: Below -0.2%. In this scenario, the AUD/USD will likely fall and could break a second support level.
For more on AUD/USD, see the AUD/USD.
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