Australian Gross Domestic Product (GDP) is a key release, released each quarter, which measures production and growth of the economy. Analysts consider GDP one the most important indicators of economic activity. A reading which is better than the market forecast is bullish for the Australian dollar.
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.
In Q2, GDP rose 0.6%, falling short of the estimate of 0.8%. For Q3, the markets are expecting another gain of 0.6%. Will the key indicator surprise the markets and beat the forecast?
Sentiments and levels
Although the AUD/USD has been marked by range trading for the past month, traders should bear in mind that the aussie has been making slow but steady progress, having gained around three cents against the greenback since early October. The looming fiscal crisis in the US will likely impact on the movement of the pair. In all likelihood, some kind of compromise will be reached on Capital Hill, and the resulting positive market sentiment should increase the demand for riskier currencies like the Australian dollar. So, the overall sentiment is bullish on AUD/USD towards this release.
Technical levels, from top to bottom: 1.0718, 1.0605, 1.0508, 1.0402, 1.0326, and 1.0230.
Within expectations: 0.3% to 0.9%. In such a scenario, AUD/USD is likely to rise within range, with a small chance of breaking higher.
Above expectations: 1.0% to 1.3%: An unexpected higher reading can push the pair above one resistance line.
Well above expectations: Above 1.3%: An surge in the reading would bolster the Australian dollar, and the pair could break a second line of resistance as a result.
Below expectations: -0.4% to -.2%: A negative GDP figure could push AUD/USD below one support level.
Well below expectations: Below -0.4%. A very weak reading would hurt the aussie, and the pair could push below a second level of support.