|

AUD/USD pauses RBA-led rally below 0.6700 as Australia Q1 GDP disappoints, China trade data eyed

  • AUD/USD retreats from three-week high on downbeat Aussie economic growth figures.
  • Australia Q1 GDP rose 0.2%  QoQ versus 0.3% expected, 0.5% prior.
  • RBA’s hawkish surprise, Governor Lowe’s hints of further rate hikes keep Aussie pair buyers hopeful.
  • China trade numbers, risk catalysts eyed for clear directions.

AUD/USD reverses from the highest levels in three weeks after Australia’s first quarter (Q1) Gross Domestic Product (GDP) print a downbeat outcome early Wednesday. In doing so, the Aussie pair trims the Reserve Bank of Australia’s (RBA) led gains to 0.6675 by staying mildly bid, despite the latest fall, amid a sluggish session.

That said, Aussie Q1 GDP rose 0.2% QoQ compared to 0.5% previous readings and 0.3% market forecasts. On the same line, the yearly GDP came in as 2.3% versus the analysts’ estimation of 2.4% YoY and 2.7% previous readings.

Also read: Aussie Gross Domestic Product (Q1): Miss by 0.1% QoQ and YoY, AUD/USD in 15 pip rangesteady

RBA Governor Philip Lowe signaled further rate hikes from the Aussie central bank and propelled the five-day uptrend of the Aussie pair. That said, the policymaker said, “Some further tightening of monetary policy may be required, depending on how economy and inflation evolve.” It should be known that the RBA surprised markets for the second time in a row by announcing a 25 basis points (bps) rate hike on Tuesday.

Also read: RBA’s Lowe: Too early to declare victory in the battle against inflation

While the Aussie GDP fails to tame the RBA-inspired optimism for the AUD/USD buyers, the softer US Dollar adds strength to the pair’s upside momentum.

US Dollar Index (DXY) reverses the previous day’s corrective bounce while taking offers around 104.00, down 0.10% on a day by the press time. In doing so, the greenback’s gauge versus six major currencies suffers from downbeat market bets on the Fed’s next move. That said, the interest rate futures show a nearly 15% probability of a June rate hike. The reason could be linked to downbeat United States activity data released on Monday, as well as the previously dovish comments from the Federal Reserve (Fed) Officials ahead of the pre-Fed blackout.

Additionally favoring the AUD/USD bulls could be the cautious optimism in the markets, as portrayed by the mildly bid US stock futures and sluggish Treasury bond yields.

Having witnessed the initial market reaction to the Aussie Q1 GDP, AUD/USD pair traders should wait for China trade numbers for April for clear directions. However, the bulls are likely to keep the reins amid the latest RBA versus Fed divergence.

Technical analysis

Although, an upside break of the previous support line stretched from early March, around 0.6620 by the press time, joins successful trading beyond the 50-DMA level surrounding 0.6665 to favor the AUD/USD bulls, the 200-DMA hurdle of near the 0.6700 threshold caps the Aussie pair’s run-up.

Additional important levels

Overview
Today last price0.668
Today Daily Change0.0008
Today Daily Change %0.12%
Today daily open0.6672
 
Trends
Daily SMA200.6613
Daily SMA500.6662
Daily SMA1000.6748
Daily SMA2000.6692
 
Levels
Previous Daily High0.6685
Previous Daily Low0.661
Previous Weekly High0.6639
Previous Weekly Low0.6458
Previous Monthly High0.6818
Previous Monthly Low0.6458
Daily Fibonacci 38.2%0.6656
Daily Fibonacci 61.8%0.6639
Daily Pivot Point S10.6626
Daily Pivot Point S20.658
Daily Pivot Point S30.655
Daily Pivot Point R10.6702
Daily Pivot Point R20.6731
Daily Pivot Point R30.6777

Author

Anil Panchal

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

More from Anil Panchal
Share:

Editor's Picks

GBP/USD resumes downside below 1.3200

GBP/USD resumes its downside below 1.3200 in European trading on Wednesday. The pair remains vulnerable amid a broadly firmer US Dollar and chaotic UK political environment. The focus is now on BoE-speak for further trading impetus.

EUR/USD sits at yearly low near 1.1350 on USD strength

EUR/USD sits at yearly lows near 1.1350 in the European morning on Wednesday. The pair remains vulnerable to further declines amid a bullish US Dollar. The Greenback continues to draw support from hawkish Fed bets and US-Iran peace deal uncertainty.

Gold: Bears retain control as Fed rate hike bets continue to boost USD

Gold recovers slightly from a nearly two-week low, around the $4,050 region, touched earlier this Wednesday. The commodity, however, sticks to its bearish bias for the second straight day, and seems vulnerable to weaken further amid sustained US Dollar buying.

Dogecoin tests a key make-or-break point amid waning retail support

Dogecoin trades below $0.08000 maintaining a steady decline for the seventh straight week. The meme coin is losing its retail strength as DOGE futures Open Interest drops 10% in 24 hours, while institutional demand remains muted with zero inflows so far this week.

Tech rout weighs on US stocks as the USD clocks a fresh 2026 high

Major US equity benchmarks ended Tuesday’s session considerably in the red, with the Nasdaq 100 down 3.3%, the S&P 500 off by 1.4%, and the Dow Jones down 0.1%. Stocks were largely weighed down by tech amid doubts over the AI-driven rally; the Philadelphia Semiconductor Index slid nearly 8%.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.