The bid tone around the AUD strengthened, pushing the AUD/USD to a session high of 0.7219 after the Australian Bureau of Statistics (ABS) reported an above-forecast second-quarter gross domestic product (GDP).
The Australian economy grew by 0.9 percent quarter-on-quarter in seasonally adjusted chain volume terms in the March quarter, beating the estimated growth rate of 0.7 percent. The economy had expanded 1 percent in the March quarter.
The net exports contributed 0.1 percentage points to GDP growth as expected and the household final consumption expenditure increased 0.7% during the quarter, contributing 0.4 percentage points to GDP growth.
The upbeat GDP figure is boding well for the AUD, which is looking oversold as per the 14-week relative strength index (RSI). More importantly, it highlights the resilience in the Australian economy and will likely squash dovish RBA expectations.
As a result, the pair may remain well bid during the day and could move above the 100-hour MA of 0.7224 if China's services PMI reading, due at 01:45 GMT, betters estimates. It is worth noting that the pair has already scaled the 50-hour MA hurdle, validating the bullish reversal suggested by the positive RSI divergence on the hourly chart.
Source : FX Street