Australia printed a stronger-than-expected GDP determine, because the financial system grew 0.6% quarter-on-quarter in Q2 2025, additional weighing on RBA expectations. To high it off, the earlier interval additionally noticed a constructive revision from 0.2% to 0.3% quarterly progress.
Let’s look at which pairs from our watchlist capitalized on this surroundings of decreased RBA dovishness to find out if our bullish AUD concepts delivered worthwhile alternatives.
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The Setup
- What We Had been Watching: Australia’s Gross Home Product (Q2 2025)
- The Expectation: Development to speed up from 0.2% q/q in Q1 to 0.4% in Q2
- Knowledge final result: GDP rose 0.6% q/q or 1.8% on an annualized foundation, its quickest tempo of progress since September 2023
- Market surroundings surrounding the occasion: Combined and standard broad market correlations; gold rallied to file highs on safe-haven demand amid surging international bond yields on political and financial issues
Occasion End result
Australia printed one more upbeat financial report, because the Q2 2025 GDP studying beat market estimates whereas the earlier quarter’s determine noticed a constructive revision. Family consumption contributed 0.4 proportion factors to progress, rising 0.9% as discretionary spending elevated 1.4%.
To be taught extra concerning the occasion, try our protection on the Australia GDP report
Basic Bias Triggered: Bullish AUD setups
Conventional market correlations appeared to disintegrate main as much as the Australian GDP launch, as safe-haven valuable metals like gold had been on the rise whereas authorities bonds have been promoting off, triggering file highs for long-term bond yields within the U.Okay. and Japan.
Among the many elements that seemingly sparked the surge in yields have been the political fallout after Japan’s elections and U.Okay. authorities spending issues. On the similar time, market gamers remained anxious after the U.S. Federal Appeals Court docket dominated that most of Trump’s tariffs have been unlawful, preserving commerce coverage uncertainty in play because the case is taken as much as the Supreme Court docket for ruling by mid-October.
Including one other layer of complexity to total sentiment was positioning forward of the much-anticipated U.S. NFP launch, which may form September Fed coverage expectations, together with ongoing challenges to Fed independence.
Later within the week, crude oil began marching to the beat of its personal drum when rumors swirled that OPEC+ was contemplating one other manufacturing increase. This was adopted by reviews confirming that the cartel really pumped extra barrels of oil than anticipated, with the API and EIA stock figures additionally posting shock beneficial properties in stockpiles to additional stoke oversupply fears.
The highlight shifted on Thursday to U.S. main jobs indicators because the NFP launch drew nearer, with majority of reviews (JOLTS job openings, Challenger job cuts, ADP non-farm employment change, and ISM providers PMI) hinting at a softer improve in hiring, preserving the greenback torn between safe-haven flows and dovish Fed expectations.
Friday’s buying and selling was dominated by very weak employment information from each the US and Canada. US payrolls solely added simply 22,000 jobs in August (nicely beneath the 75,000 forecast), and former month’s numbers have been revised decrease considerably by a web -21K between June and July. The disappointing jobs report triggered a Greenback selloff and collapse in bond yields, supporting beneficial properties in counter currencies like AUD & CHF. Canada joined the disappointing jobs get together, sharing that it misplaced a large 65K jobs, considerably elevating the chances of a September BOC price minimize and crashing CAD within the course of.
With a blended and weird broad market surroundings, it was a tricky name between AUD/USD and AUD/CAD on which had the most effective potential for a web constructive final result. Finally, we thought BOTH have been good choices with broad market influences being much less of a weight on market conduct.
AUD/USD: Web Bullish AUD Occasion final result + Danger-On Situation = Arguably good odds of a web constructive final result
AUD/USD 1-hour Foreign exchange Chart by TradingView
First, let’s contact on the AUD/USD dialogue. This setup performed out fairly nicely, because the pair was hovering across the goal entry space main as much as the GDP launch and was capable of finding assist on the technical ranges highlighted (Pivot level, Fibs, and transferring averages) when the occasion turned out in favor of additional AUD upside.
Previous to the occasion, value had dipped to the S1 (.6480) Pivot assist space / 0.6500 main psychological assist, then bouncing to the Pivot Level degree (0.6520) forward of the GDP occasion.
Stronger-than-expected Australian progress figures ultimately hit the wires to seemingly usher in basic consumers, seemingly a contributor to taking the pair as much as the 0.6550 minor psychological resistance within the periods that adopted, however falling wanting the swing excessive. A reversal again to the draw back hit AUD/USD on Thursday, seemingly pushed by the rebound within the Buck, taking the pair again to the pivot level degree, the place it discovered assist as soon as once more.
On Friday, the widespread U.S. greenback sell-off propelled AUD/USD sharply greater, permitting it to blast via the R1 Pivot Resistance space and former resistance ranges to the touch highs not seen since early August. The mixture of a basically sturdy Aussie and a basically weak U.S. greenback made this the standout performer.
AUD/CAD: Web Bullish AUD Occasion final result + Danger-Off Situation = Sturdy odds of a web constructive final result
AUD/CAD 1-hour Foreign exchange Chart by TradingView
This AUD/CAD setup additionally deserves a spot in our eligible performs for the week, given how total market sentiment and threat correlations have been in flux forward of the occasion and afterwards.
Whereas the pair already dipped beneath the shallow pullback assist space mentioned within the watchlist, our analysts have been in a position to pinpoint potential crude oil weak spot that might hold the bullish state of affairs in play. Moreover, AUD/CAD additionally saved its head above the ascending pattern line that seemingly served as the road within the sand for an uptrend correction, attracting bulls at S1 (.8960) earlier than a extra sustained rally adopted.
The pair was capable of finding its method again throughout the space of curiosity forward of the Australian GDP launch, which then triggered a bounce again to the swing excessive within the session’s that adopted. Bearish crude oil developments, together with the OPEC+ rumored manufacturing increase and oversupply issues have been very seemingly massive basic contributors, presumably serving to take the pair previous R2 (.9020) and allowed it to remain afloat above R1 (.9010) even after one other pullback.
The rally went into overdrive on Friday. A catastrophic Canadian employment report, which confirmed an sudden lack of 65,500 jobs, decimated the loonie. This coincided with broad risk-off sentiment following the weak U.S. jobs information. The mixture despatched AUD/CAD hovering, blowing previous all resistance ranges and making it one of many week’s strongest trending pairs. The end result was a confluence of Aussie energy, oil value weak spot, and a dramatic collapse within the Canadian greenback, all leading to a roughly 72 pip achieve (110 pip achieve at peak) publish Australian GDP launch for the bulls.
Not Eligible to maneuver past Watchlist – Bearish AUD Setups
GBP/AUD: Web Bearish AUD Occasion End result + Danger-On Situation
GBP/AUD 1-hour Foreign exchange Chart by TradingView
The GDP beat invalidated this bearish AUD setup. On the time of our unique dialogue, this pair appeared prepared to interrupt above its short-term descending pattern line. However main as much as the Australian GDP launch, GBP/AUD broke down even additional, earlier than the end result of the occasion didn’t favor Aussie bears, decreasing the chances of a profitable upside reversal.
However GBP/AUD did really rebound regardless of the bullish Australian GDP occasion, probably because of a powerful bullish reversal in sentiment within the pound, seemingly a response to optimistic feedback from each UK Finance Minister Reeves and BOE Governor Bailey on Wednesday. From there GBP/AUD, stabilized and traded principally sideways (with slight bearish lean), as broad market sentiment and their roles as beta currencies seemingly took again management over each Sterling and the Aussie.
AUD/CHF: Web Bearish AUD Occasion final result + Danger-Off Situation
AUD/CHF 1-hour Foreign exchange Chart by TradingView
Even with periodic safe-haven flows that ought to have favored the Swiss franc, Australia’s stronger progress prospects saved AUD/CHF supported above key ranges. Stronger-than-expected Australian GDP information led to a break above the near-term resistance zone our analysts have been eyeing forward of the report. Nonetheless, the pair nonetheless struggled to maintain its transfer greater instantly after the occasion since threat sentiment appeared to favor safe-haven currencies then.
Weaker-than-expected Swiss CPI ultimately gave the breakout some legs, taking AUD/CHF in for a take a look at of R1 (.5260) earlier than retreating again to the damaged resistance degree, as merchants seemingly squared away positions main as much as the high-impact NFP launch.
The horrible U.S. NFP report on Friday triggered a large flight to security, re-establishing the Swiss franc’s function as the last word safe-haven forex. This surge in demand for the franc brought on a pointy drop in AUD/CHF, erasing earlier beneficial properties. The pair’s value motion turned a tug-of-war between Australia’s sturdy fundamentals and the franc’s unparalleled enchantment throughout occasions of market panic.
The Verdict
Australia’s upside GDP shock supported the potential for additional AUD beneficial properties, persevering with the Land Down Below’s streak of constructive information that weighed on RBA price easing hopes. And given the bizarre broad market surroundings, we thought AUD/USD and AUD/CAD have been each nice candidates to maneuver on from the Watchlist stage to the strategy planning stage, and presumably stay publicity / buying and selling stage.
And luckily for each, the online outcomes for a bullish lean have been seemingly web constructive on condition that each pairs closed the week nicely above each dialogue ranges and publish occasion ranges.
Now, given the variety of high tier occasions & information movement, and the choppiness of value motion in each pairs, extra notably in AUD/USD, the planning and execution of a buying and selling technique would have seemingly been an element within the final result. However as soon as once more, with the markets notably greater on the week, odds are fairly sturdy of a web constructive final result for the bulls.
With that being the case, we rated the watchlist discussions as “extremely seemingly” of supporting a web constructive final result.
Key Takeaways:
1. Adapting to Recent Market Drivers
Whereas the AUD/CAD setup was additionally basically aligned with the upside Australian GDP shock, the pair didn’t instantly exhibit bullish conduct main as much as the discharge, as intermarket drivers and counter forex flows seemed to be dominant then. Nonetheless, the pair managed to remain throughout the goal entry zone earlier than quickly banking on oil-related updates that resulted in a extra extended AUD/CAD rally.
Utility: With asset lessons showing to answer particular person catalysts, pay additional shut consideration to particular market elements that might nonetheless render a commerce legitimate post-event. Put together for different potential entry methods that might supply higher R:R if the pair stays throughout the goal entry zone and basic elements stay in line.
2. Hedging Throughout a Combined Calendar Week
With the U.S. greenback being pulled in numerous instructions by safe-haven flows and dovish Fed expectations, to not point out commerce headlines and blended jobs information, it is sensible to contemplate different currencies like CAD that transfer kind of in tandem with the greenback however should not as delicate to a mess of driving elements.
On this week’s state of affairs, whereas the AUD/USD setup cleanly reacted to the technical ranges and basic catalysts mentioned within the watchlist, the follow-through was restricted since different influences took over because the week went on. AUD/CAD appeared to invalidate the lengthy entry setup forward of the GDP launch, however was in a greater place to maintain its bounce when crude oil updates all turned out in favor of extra CAD draw back.
Utility: Contemplate buying and selling correlated currencies, akin to CAD as a proxy for USD on this week’s case, if one is dealing with a extra advanced mixture of catalysts whereas the opposite has fewer transferring components. Schedule common check-ins (every day or mid-week) to reassess whether or not the unique basic drivers are nonetheless legitimate or if new themes have emerged that might create higher alternatives in numerous devices.
Disclaimer: The foreign exchange evaluation content material offered in Babypips.com is meant solely for informational functions solely. The technical and basic eventualities mentioned are introduced to focus on and educate on tips on how to spot potential market alternatives which will warrant additional impartial analysis and due diligence. This content material reveals how we cowl a portion of the complete buying and selling course of, and doesn’t represent that we ever give particular funding or buying and selling recommendation. The setups and analyses introduced on Babypips.com are very seemingly not appropriate for all portfolios or buying and selling types.
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