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

Today last price 0.668
Today Daily Change 0.0008
Today Daily Change % 0.12%
Today daily open 0.6672
Daily SMA20 0.6613
Daily SMA50 0.6662
Daily SMA100 0.6748
Daily SMA200 0.6692
Previous Daily High 0.6685
Previous Daily Low 0.661
Previous Weekly High 0.6639
Previous Weekly Low 0.6458
Previous Monthly High 0.6818
Previous Monthly Low 0.6458
Daily Fibonacci 38.2% 0.6656
Daily Fibonacci 61.8% 0.6639
Daily Pivot Point S1 0.6626
Daily Pivot Point S2 0.658
Daily Pivot Point S3 0.655
Daily Pivot Point R1 0.6702
Daily Pivot Point R2 0.6731
Daily Pivot Point R3 0.6777



Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content

Recommended content

Editors’ Picks

AUD/USD: Further retracement targets the 200-day SMA

AUD/USD: Further retracement targets the 200-day SMA

The downward bias in AUD/USD remained unabated for yet another session on Tuesday, dragging spot to five-week lows and approaching the key 0.6600 neighbourhood.


EUR/USD remains vulnerable to extra pullbacks

EUR/USD remains vulnerable to extra pullbacks

EUR/USD retreated to multi-day lows and revisited the 1.0840 region on the back of the resumption of the buying interest in the greenback and ahead of key data releases due later in the week.


Gold reconquers $2,400, lacks directional momentum

Gold reconquers $2,400, lacks directional momentum

Gold stages a rebound and trades above $2,400 on Tuesday after closing the fourth consecutive trading day in negative territory on Monday. The pullback seen in US Treasury bond yields help XAU/USD cling to modest daily gains despite the US Dollar's resilience.

Gold News

Ripple stablecoin unlikely to invite legal trouble with SEC, XRP loses key support

Ripple stablecoin unlikely to invite legal trouble with SEC, XRP loses key support

Ripple (XRP), the native token of the XRP Ledger slipped under $0.60, a key psychological support for the altcoin. The two key market movers are the Securities & Exchange Commission’s (SEC) lawsuit against Ripple and the upcoming stablecoin RealUSD (RLUSD).

Read more

US S&P Global PMIs Preview: Economic expansion could struggle in July Premium

US S&P Global PMIs Preview: Economic expansion could struggle in July

On Wednesday, S&P Global will release advanced readings for the United States (US) Purchasing Managers Indexes (PMIs) for July, a monthly survey of business activity. The survey is anticipated to indicate that US economic activity in the private sector faced mixed trends during the current month.

Read more