We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bullish
GBP/USD
Bullish
USD/JPY
Bullish
Gold
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Mixed
Bitcoin
Bullish
More View more
Real Time News
  • As the global economy continues to contract, the risk of geopolitical threats undermining financial and economic stability are rising, leaving the door open to violent volatility. Get your market update from @ZabelinDimitri here:https://t.co/2HEzqPobvA https://t.co/k13SwJmbRm
  • RT @IGSquawk: We're currently pricing #GBPUSD at 1.2852 and #FTSE at 7129.2 That's a drop of 1.18% from Fridays close for GBPUSD and 0.22%…
  • #DidYouKnow a #Doji candlestick signals market indecision and the potential for a change in direction. What are the top five types of Doji candlesticks? Find out: https://t.co/c51s3IBcEu https://t.co/K6W9X4v8XD
  • The $NZD may be carving out a near-term bottom against its US counterpart but scope for gains seems limited within a broader downtrend. Get your technical analysis from @IlyaSpivak here: https://t.co/7bsVuSyWMn https://t.co/DsmNYKk8v3
  • Can you trade with the joy of missing out (#JOMO)? Find out how you can turn your #FOMOintrading to JOMO here: https://t.co/G5H26NXZQe https://t.co/pVdKUPzvmk
  • RT @PaulBrandITV: It’s likely that this will end up in court on Monday. The case in the Scottish courts may well consider that this doesn’t…
  • RT @PaulBrandITV: BREAKING: Tonight the PM has sent this letter to EU requesting an extension to Brexit. Wording is copied and pasted from…
  • RT @FactSet: $SPX is reporting a (Y/Y) decline in earnings of -4.7% for Q3 2019, which would mark the 3rd straight quarter of (Y/Y) earning…
  • RT @MehreenKhn: 🔔🔔 Here is the letter Boris Johnson has sent to Brussels tonight saying an extension would "damage" interests of the EU and…
  • What is #forex time frames and how can it be applied to multi-time frame analysis. Find out here: https://t.co/uEmAGW4ckP https://t.co/f4RrjSQK8y
AUDUSD Rate Rebound Vulnerable to Record Low China GDP

AUDUSD Rate Rebound Vulnerable to Record Low China GDP

2019-07-15 00:30:00
David Song, Currency Strategist
Share:

Trading the News: China Gross Domestic Product (GDP)

Updates to China’s Gross Domestic Product (GDP) report may undermine the recent rebound in AUDUSD as the growth rate is anticipated to hit a record low in the first quarter of 2019.

Image of DailyFX economic calendar

A GDP print of 6.2% or lower would mark the slowest pace of growth since the data series began in 1992, and the weakening outlook for the Asia/Pacific region may drag on the Australian dollar as it puts pressure on the Reserve Bank of Australia (RBA) to further insulate the economy.

In turn, the RBA may keep the door open to implement another rate cut in 2019 as “the risks to the global economy are tilted to the downside,” and Governor Philip Lowe and Co. may continue to endorse a dovish forward guidance at the next meeting on August 6 amid the ongoing trade dispute between the US and China, Australia’s largest trading partner.

In contrast, an above-forecast GDP print for China may fuel the recent rebound in AUDUSD as it curbs bets for another RBA rate cut, with the exchange rate at risk of testing the monthly-high (0.7048) as it extends the series of higher highs and lows from last week.

Sign up and join DailyFX Currency Strategist David Song LIVE for an opportunity to discuss potential trade setups.

Impact that China’s GDP report had on AUD/USD during the last release

Period

Data Released

Estimate

Actual

Pips Change

(1 Hour post event )

Pips Change

(End of Day post event)

1Q

2019

04/17/2019 02:00:00 GMT

6.3%

6.4%

+16

+4

1Q 2019 China Gross Domestic Product (GDP)

AUD/USD 10-Minute Chart

Image of audusd 10-minute chart

China grew another 6.4% during the first quarter of 2019 to match the slowest pace of growth since 2009, with economic activity increasing 1.4% during the first three-months of the year after expanding 1.5% during the previous period. It seems as though China’s economy will continue to face headwinds amid the ongoing trade dispute with the United States, and it remains to be seen if a deal will be reached over the coming months as the Trump administration relies on tariffs and sanctions to push its agenda.

The Australian dollar gained ground following the in-line GDP print, with AUDUSD climbing above the 0.7200 handle, but the market reaction was short-lived as the exchange rate closed the day at 0.7179. Learn more with the DailyFX Advanced Guide for Trading the News.

AUD/USD Rate Daily Chart

Image of audusd daily chart

  • Keep in mind, the AUDUSD rebound following the currency market flash-crash has been capped by the 200-Day SMA (0.7091), with the exchange rate marking another failed attempt to break/close above the moving average in April.
  • More recently, the advance from June-low (0.6832) appears to have stalled ahead of the May-high (0.7061), but need a break/close below the 0.6950 (61.8% expansion) to 0.6960 (38.2% retracement) region to bring the downside targets back on the radar.
  • First area of interest comes in around 0.6850 (78.6% expansion) to 0.6880 (23.6% retracement) followed by the 0.6730 (100% expansion) region.

Additional Trading Resources

New to the currency market? Want a better understanding of the different approaches for trading? Start by downloading and reviewing the DailyFX Beginners Guide.

Are you looking to improve your trading approach? Review the ‘Traits of a Successful Trader series on how to effectively use leverage along with other best practices that any trader can follow.

--- Written by David Song, Currency Strategist

Follow me on Twitter at @DavidJSong.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.