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Australia GDP Grew at 1.1% in Q1; AUD/NZD Rallies

According to the Australian Bureau of Statistics, Q1 GDP came in at 1.1%. Economists expected about a 0.9% growth, and the GDP in the previous quarter was 0.8%. 


When compared to a year ago, the Australian economy expanded 3.5%. 

A big component of growth came from exports surging 4.8%.

The stronger than expectd GDP reading gives the government some room to work with budget cuts. 

AUD/NZD was breaking above a flag pattern ahead of the GDP data. Then during the 6/4 Asian session, there was a slight pullback. After the GDP data, the market confirmed the earlier breakout and extended the bullish scenario.

(audnzd 1h chart, 6/4)

As we get into the 6/4 US session, the AUD/NZD is holding around 1.1030. There could be some near-term resistance here, but when we look at the daily chart, we see a more significant bullish breakout that has upside potential above 1.1030.

(audnzd Daily chart, 6/4)

In the daily chart, you see the break above 1.0946 consolidation resistance, and the 200-day SMA. The GDP reaction clarifies the breakout, opening up the 1.1170 level, a previous support pivot in Sept. 2013.