Australia printed a stronger-than-expected GDP determine, because the economic system grew 0.6% quarter-on-quarter in Q2 2025, additional weighing on RBA expectations. To prime it off, the earlier interval additionally noticed a constructive revision from 0.2% to 0.3% quarterly development.
Let’s look at which pairs from our watchlist capitalized on this atmosphere of lowered 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: Progress to speed up from 0.2% q/q in Q1 to 0.4% in Q2
- Information final result: GDP rose 0.6% q/q or 1.8% on an annualized foundation, its quickest tempo of development since September 2023
- Market atmosphere surrounding the occasion: Combined and traditional 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 development, rising 0.9% as discretionary spending elevated 1.4%.
To be taught extra concerning the occasion, try our protection on the Australia GDP report
Elementary 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 had 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 had 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 Courtroom dominated that most of Trump’s tariffs had been unlawful, retaining commerce coverage uncertainty in play because the case is taken as much as the Supreme Courtroom 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 might 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 studies confirming that the cartel truly pumped extra barrels of oil than anticipated, with the API and EIA stock figures additionally posting shock features 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 studies (JOLTS job openings, Challenger job cuts, ADP non-farm employment change, and ISM companies PMI) hinting at a softer improve in hiring, retaining the greenback torn between safe-haven flows and dovish Fed expectations.
Friday’s buying and selling was dominated by very weak employment knowledge from each the US and Canada. US payrolls solely added simply 22,000 jobs in August (nicely under the 75,000 forecast), and former month’s numbers had 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 features in counter currencies like AUD & CHF. Canada joined the disappointing jobs social gathering, sharing that it misplaced a large 65K jobs, considerably elevating the percentages of a September BOC price lower and crashing CAD within the course of.
With a blended and weird broad market atmosphere, it was a troublesome name between AUD/USD and AUD/CAD on which had one of the best potential for a web constructive final result. In the end, we thought BOTH had been good choices with broad market influences being much less of a weight on market habits.
AUD/USD: Web Bullish AUD Occasion final result + Threat-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 help on the technical ranges highlighted (Pivot level, Fibs, and shifting averages) when the occasion turned out in favor of additional AUD upside.
Previous to the occasion, value had dipped to the S1 (.6480) Pivot help space / 0.6500 main psychological help, then bouncing to the Pivot Level degree (0.6520) forward of the GDP occasion.
Stronger-than-expected Australian development figures ultimately hit the wires to seemingly usher in basic patrons, seemingly a contributor to taking the pair as much as the 0.6550 minor psychological resistance within the periods that adopted, however falling in need of the swing excessive. A reversal again to the draw back hit AUD/USD on Thursday, seemingly pushed by the rebound within the Dollar, taking the pair again to the pivot level degree, the place it discovered help 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 + Threat-Off Situation = Robust 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 under the shallow pullback help space mentioned within the watchlist, our analysts had been in a position to pinpoint potential crude oil weak point that might preserve the bullish situation in play. In addition to, 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 manner again inside 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 had been very seemingly huge 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 surprising lack of 65,500 jobs, decimated the loonie. This coincided with broad risk-off sentiment following the weak U.S. jobs knowledge. 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 point, 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 + Threat-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, reducing the percentages of a profitable upside reversal.
However GBP/AUD did truly rebound regardless of the bullish Australian GDP occasion, probably as a consequence of a robust 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 largely 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 + Threat-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 development prospects saved AUD/CHF supported above key ranges. Stronger-than-expected Australian GDP knowledge led to a break above the near-term resistance zone our analysts had 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 check 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 foreign money. This surge in demand for the franc prompted a pointy drop in AUD/CHF, erasing earlier features. 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 opportunity of additional AUD features, persevering with the Land Down Underneath’s streak of constructive knowledge that weighed on RBA price easing hopes. And given the weird broad market atmosphere, we thought AUD/USD and AUD/CAD had been each nice candidates to maneuver on from the Watchlist stage to the strategy planning stage, and presumably reside publicity / buying and selling stage.
And thankfully for each, the web outcomes for a bullish lean had been seemingly web constructive provided that each pairs closed the week nicely above each dialogue ranges and publish occasion ranges.
Now, given the variety of prime 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 Contemporary Market Drivers
Whereas the AUD/CAD setup was additionally basically aligned with the upside Australian GDP shock, the pair didn’t instantly exhibit bullish habits main as much as the discharge, as intermarket drivers and counter foreign money flows gave the impression to be dominant then. Nonetheless, the pair managed to remain inside the goal entry zone earlier than quickly banking on oil-related updates that resulted in a extra extended AUD/CAD rally.
Utility: With asset courses showing to reply to particular person catalysts, pay further 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 inside 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 several instructions by safe-haven flows and dovish Fed expectations, to not point out commerce headlines and blended jobs knowledge, it is smart to contemplate different currencies like CAD that transfer kind of in tandem with the greenback however will not be as delicate to a large number of driving elements.
On this week’s situation, 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 further CAD draw back.
Utility: Take into account buying and selling correlated currencies, comparable to CAD as a proxy for USD on this week’s case, if one is dealing with a extra complicated mixture of catalysts whereas the opposite has fewer shifting elements. 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 several 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 learn how to spot potential market alternatives which will warrant additional unbiased 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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