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November 19, 2019
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Forex

China GDP Preview: Lower Growth Rate to Rattle AUD/USD Recovery

Trading the News: China Gross Domestic Product (GDP)

Updates to China’s Gross Domestic Product (GDP) report could rattle the latest advance in AUD/USD as Australia’s largest buying and selling associate is anticipated to develop 6.1% versus 6.2% within the second quarter of 2019.

The commerce battle with the United States could produce one other downtick within the GDP print as China faces greater tariffs, and the weakening outlook for the Asia/Pacific area could produce headwinds for the Australian Dollar because it places stress on the Reserve Bank of Australia (RBA) to additional embark on its price easing cycle.

In flip, a print of 6.1% or decrease could undermine the latest advance in AUD/USD because the RBA retains its pledge to “to ease financial coverage additional if wanted.

However, efforts by Chinese officers could assist to generate a better-than-expected GDP determine as “authorities have taken additional steps to assist the economic system.”

As a consequence, a optimistic growth popping out of Australia’s largest buying and selling associate could gasoline a bigger correction in AUD/USD because it curbs hypothesis for an additional RBA price minimize.

Sign up and be a part of DailyFX Currency Strategist David Song LIVE for a possibility to talk about key themes and potential commerce setups surrounding overseas change markets.

Impact that China GDP report had on AUD/USD through the earlier launch

Period

Data Released

Estimate

Actual

Pips Change

(1 Hour put up occasion )

Pips Change

(End of Day put up occasion)

2Q

2019

07/15/2019 02:00:00 GMT

6.2%

6.2%

+11

+20

2Q 2019China Gross Domestic Product (GDP)

AUD/USD 30-Minute Chart

Image of AUD/USD 30 minute chart

Source: Trading View

China’s Gross Domestic Product (GDP) report confirmed the economic system rising 6.2% each year within the second quarter of 2019 after increasing 6.four% through the first three-months of the yr. Nevertheless, on a quarter-over-quarter foundation, the expansion price elevated 1.6% versus 1.four% for the earlier interval regardless of the continuing commerce battle with the United States.

The Australian greenback inched greater following China’s GDP report, with AUD/USD holding across the session-high (zero.7040) to shut the day at zero.7039. Learn extra with the DailyFX Advanced Guide for Trading the News.

AUD/USD Rate Daily Chart

Image of AUD/USD daily chart

Source: Trading View

  • Keep in thoughts, the AUD/USD rebound following the forex market flash-crash has been capped by the 200-Day SMA (zero.6969), with the change price marking one other failed try to break/shut above the transferring common in July.
  • Moreover, AUD/USD has taken out the September-low (zero.6688) because it continues to monitor the downward pattern carried over from late final yr.
  • However, AUD/USD trades to a recent monthly-high (zero.6833) following the failed try to shut under the zero.6690 (50% enlargement) area, with the break/shut above the zero.6800 (61.eight% enlargement) deal with bringing the zero.6850 (78.6% enlargement) space on the radar.

Additional Trading Resources

New to the forex market? Want a greater understanding of the completely different approaches for buying and selling? Start by downloading and reviewing the DailyFX Beginners Guide.

Are you wanting to enhance your buying and selling strategy? Review the ‘Traits of a Successful Trader sequence on how to successfully use leverage together with different finest practices that any dealer can comply with.

— Written by David Song, Currency Strategist

Follow me on Twitter at @DavidJSong.

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