AUD/USD Outlook: How Much Have the Lockdowns Affected Australia’s GDP?


In about an hour from now, the Australian Bureau of Statistics releases the GDP data for the 2nd quarter of 2021. Analysts are predicting a slower growth of 0.5% against the first-quarter growth of 1.8%. The consensus reflects the outlook for the Australian economy, which is expected to have taken a hit from renewed lockdowns and the slower growth of China, the country’s major trade partner.

Furthermore, commodity prices and their associated currencies are still smarting from the price-in effect of the market in response to the Fed’s decision to start tapering in late 2021. The Aussie Dollar has been a major casualty of this decision, losing nearly 800 pips in the last 3 months.

The currency pair of choice for trading this report is the AUD/USD. How will this pair fare?

Trade Outlook for AUD/USD

A reading which exceeds 1.0% will be a positive market surprise. If the GDP reading is 1.0% and above, the pair will get some fillip to aim for targets above 0.73382. These targets include 0.73724 and 0.74077. Only a break of 0.75141 will restore a bullish trend on the pair. However, this goal looks quite far-fetched at the moment. 

On the flip side, a GDP reading which is lower than 0.5% or only marginally higher than that mark is likely to reinforce weakness on the pair. This weakness may manifest as a transient rise to 0.73382, from where rejection and additional selling could ensue. These rally-sells would target 0.72182 and 0.71471 initially, with 0.70657 coming into the picture if the decline is extensive.

AUD/USD: Daily Chart

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