Australia’s Gross Domestic Product (GDP) report for Q4 2024 is set to be released on March 5, 2025. This release is of paramount importance to forex traders as it will determine the short-term trajectory of the Australian Dollar (AUD) and its correlation with major currency pairs, including AUD/USD, AUD/JPY, and AUD/NZD.
By integrating both fundamental and technical analysis, we aim to predict possible price movements and key trading strategies following the announcement.
Fundamental Analysis: Macroeconomic Overview
Previous GDP Performance & Expectations
The Q3 2024 GDP growth rate stood at 0.3% (QoQ), missing the forecast of 0.5%, bringing the YoY growth to just 0.8%, its weakest since the pandemic. The primary factors behind this sluggish growth included:
✔ Rising borrowing costs due to the Reserve Bank of Australia’s (RBA) 4.35% interest rate holding pattern.
✔ Declining household spending amid persistent inflationary pressure.
✔ Weakening Chinese demand for Australian exports, particularly in iron ore and coal.
For Q4 2024, forecasts suggest a growth rate of 0.4% (QoQ) and 1.1% (YoY), with expectations influenced by:
- Interest Rate Outlook: The RBA has hinted at possible rate cuts in mid-2025 if inflation continues to ease.
- Commodity Market Trends: Australia’s reliance on raw material exports (iron ore, lithium, and coal) remains a critical factor.
- External Market Forces: The USD strength and China’s economic slowdown could weigh on GDP figures.
Key Macroeconomic Indicators to Watch
Before the GDP release, traders should monitor:
📌 CPI Inflation Rate (Previous: 3.5%, Forecast: 3.2%) – A lower CPI could support the case for rate cuts.
📌 Employment Data (Unemployment Rate: 4.1%, Wages Growth: 3.7% YoY) – A weaker labor market signals slowing GDP.
📌 Consumer Sentiment Index (Current: 78.5, a 10-year low) – Indicates weak household spending.
📌 Retail Sales Growth (Previous: -0.2%, Forecast: +0.1%) – A rebound here may support GDP estimates.
If GDP exceeds expectations, the AUD/USD could rally, while a lower-than-expected result could lead to further selling pressure.
Technical Analysis: AUD/USD Outlook Before & After GDP Release
Current Price Action & Chart Patterns
📉 AUD/USD Current Price: 0.6525 (as of March 2, 2025)
📊 52-Week Range: 0.6087 – 0.6825
⚠ YTD Performance: -3.8%
Key Technical Indicators
📌 Moving Averages
✔ 200-Day SMA: 0.6652 (Long-term trend remains bearish)
✔ 50-Day SMA: 0.6485 (Short-term trend gaining momentum)
✔ 10-Day EMA: 0.6510 (Short-term bullish signal)
📌 RSI (Relative Strength Index)
✔ Current RSI: 52.3 (Neutral to slightly bullish)
✔ Above 60 = Bullish momentum, Below 40 = Bearish territory
📌 MACD (Moving Average Convergence Divergence)
✔ MACD Line crossing above Signal Line at -0.0008 – Bullish momentum forming.
✔ Histogram bars turning green – Early signs of upside potential.
📌 Bollinger Bands
✔ Upper Band: 0.6570
✔ Lower Band: 0.6470
✔ Midpoint: 0.6520
Price is hovering near the midpoint, suggesting a breakout could be imminent post-GDP release.
Support & Resistance Levels for AUD/USD
Support Levels:
🔻 0.6450 – Minor support, recent daily lows.
🔻 0.6385 – Major technical support level.
🔻 0.6300 – Key psychological level; break below could trigger extended downside.
Resistance Levels:
🔺 0.6560 – Near-term resistance, Bollinger Band upper range.
🔺 0.6625 – 200-day SMA; a break above could signal trend reversal.
🔺 0.6680 – Strong resistance zone, 50% Fibonacci retracement from 2024 highs.
Trading Strategy for GDP Release on March 5, 2025
1️⃣ Bullish Scenario: Stronger GDP Growth (>0.5%)
✔ AUD/USD could test resistance at 0.6625, breaking above 50-day SMA.
✔ Long positions above 0.6560, targeting 0.6680 with stop-loss at 0.6480.
✔ Confirm breakout with RSI > 60 and MACD bullish crossover.
2️⃣ Bearish Scenario: Weaker GDP Growth (<0.3%)
✔ AUD/USD may retest support at 0.6450, potentially falling to 0.6385.
✔ Short positions below 0.6480, targeting 0.6385, stop-loss at 0.6560.
✔ Look for RSI < 40 and MACD bearish crossover for confirmation.
Impact on Other Currency Pairs
📌 AUD/JPY: Bearish pressure expected if GDP underwhelms; potential decline towards 94.00.
📌 AUD/NZD: Likely to fall if GDP misses due to stronger NZD economic outlook.
📌 EUR/AUD: May gain as weaker AUD leads to capital inflows into Euro-based assets.
Final Thoughts
The March 5, 2025 GDP report will be a critical event for the Australian dollar. As a trader, using a combination of fundamental data and technical indicators is crucial to make informed trading decisions. Key takeaways:
✔ Higher-than-expected GDP → AUD/USD bullish breakout.
✔ Lower-than-expected GDP → AUD/USD bearish continuation.
✔ Monitor support/resistance levels, RSI, and MACD for confirmation.
📢 Trading Tip: Volatility is expected around the GDP release. Use stop-loss orders to manage risk, and watch for post-release pullbacks before entering new trades.