Forex News Trading AU GDP q/q 09/06/11

Australia GDP is a quarterly release similar to the U.S. Advanced GDP or the UK Pre-lim release, but usually there is only one release per quarter. Since this is a quarterly release, it is a high impact release that may change the short term trend of AUD.
Here is the forecast:

9:30pm (NY Time) AU GDP q/q Forecast 1.0% Previous -1.2%
ACTION: AUD/USD BUY 1.3% SELL 0.5%

The Trade Plan
We´ll be looking for a deviation of 0.3% to BUY or 0.5% to SELL. If we get 1.3% or better, then BUYAUD/USD; however, if we get a 0.5% or worse, we´ll probably see AUD/USD start to move downward.

The Market
Market is likely to be driven by the slew of risk adverse news releases from both US and EU.  With Credit Suisse pricing in a possible Rate Cut by the RBA, this release will undoubtedly confirm such view if we get a 0.5%, or provide support and stimulate demand if we get a strong 1.3% or better release.

The Reserve Bank of Australia has stated that with recent growth forecasts, it will need to adjust its monetary policy… therefore, if this release shows that RBA is way off in its calculations, market could reposition for a SELL trade on the already overvalued AUD.

Additional Thoughts
AUDUSD is a slow moving currency and in the event that we get a strong release, we could see renewed risk appetite that would be the key focus of the session. Therefore, on a strong release, it may be best to jump in as soon as possible because we may not see much of retracement.

Pre-news Considerations
No Pre-News considerations.

DEFINITION:
“GDP is the market value of all final goods and services produced within a country in a given period of time. It is also considered the sum of value added at every stage of production of all final goods and services produced within a country in a given period of time.” In short, if you were to reduce the entire economy into a simple number, it would be the GDP.”

Thanks,