Australian Gross Domestic Product (GDP) is a key release and is published each quarter. GDP measures production and growth of the economy, and is considered by analysts as one the most important indicators of economic activity. A reading which is better than the market forecast is bullish for the pound.
Here are all the details, and 5 possible outcomes for AUD/USD.
Published on Wednesday at 00:30 GMT.
Indicator Background
Australian GDP is a key economic indicator, and provides an excellent indication of the health and direction of the Australian economy. Traders should pay close attention to the GDP release, as an unexpected reading could affect the direction of AUD/USD.
GDP has disappointed in the past two readings, as the indicator fell below the estimate. GDP posted a modest gain of 0.5% in Q3, and the markets are expecting a similar reading for Q4, with an estimate of 0.6%. Will the indicator surprise the markets with a stronger reading than forecast?
Sentiments and levels
AUD/USD has had a shaky 2013, and has lost over 300 points since late January. Last week, the pair dipped below the 1.02 line for the first time last since October 2012, and we could see the downward trend continue. Australian data has not been impressive, and there is concern that China, Australia’s most important trading partner, is experiencing an economic slowdown. As well, the RBA has reiterated that it will lower interest rates if it needed, which would hurt the value of the Australian dollar. So, the overall sentiment is bearish on AUD/USD towards this release.
Technical levels, from top to bottom: 1.0371, 1.0326, 1.0230, 1.0174, 1.0080, and 1.00.
5 Scenarios
- Within expectations: 0.4% to 0.8%. In such a scenario, AUD/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 0.9% to 1.1%: An unexpected higher reading can push the pair above one resistance line.
- Well above expectations: Above 1.1%: An surge in the reading would likely help the Australian dollar, and the pair could break a second line of resistance as a result.
- Below expectations: 0.1% to 0.3%: In this scenario, AUD/USD could drop below one support level.
- Well below expectations: Below 0.1%. A reading at or below the zero level would likely hurt the Aussie, and AUD/USD could fall below a second level of support.
For more on the Aussie, see the AUD/USD.
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