Premium Watchlist Recap: Australia GDP Report (Q2 2025)

Australia printed a stronger-than-expected GDP figure, as the economy grew 0.6% quarter-on-quarter in Q2 2025, further weighing on RBA expectations. To top it off, the previous period also saw a positive revision from 0.2% to 0.3% quarterly growth.

Let’s examine which pairs from our watchlist capitalized on this environment of reduced RBA dovishness to determine if our bullish AUD ideas delivered profitable opportunities.

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The Setup

• What We Were Watching: Australia’s Gross Domestic Product (Q2 2025)
• The Expectation: Growth to accelerate from 0.2% q/q in Q1 to 0.4% in Q2
• Data outcome: GDP rose 0.6% q/q or 1.8% on an annualized basis, its fastest pace of growth since September 2023
• Market environment surrounding the event: Mixed and usual broad market correlations; gold rallied to record highs on safe-haven demand amid surging global bond yields on political and fiscal concerns

Event Outcome

Australia printed yet another upbeat economic report, as the Q2 2025 GDP reading beat market estimates while the previous quarter’s figure saw a positive revision. Household consumption contributed 0.4 percentage points to growth, rising 0.9% as discretionary spending increased 1.4%.

To learn more about the event, check out our coverage on the Australia GDP report

Fundamental Bias Triggered: Bullish AUD setups

Traditional market correlations appeared to fall apart leading up to the Australian GDP release, as safe-haven precious metals like gold had been on the rise while government bonds were selling off, triggering record highs for long-term bond yields in the U.K. and Japan.

Among the factors that likely sparked the surge in yields were the political fallout after Japan’s elections and U.K. government spending concerns. At the same time, market players remained anxious after the U.S. Federal Appeals Court ruled that most of Trump’s tariffs were illegal, keeping trade policy uncertainty in play as the case is taken up to the Supreme Court for ruling by mid-October.

Adding another layer of complexity to overall sentiment was positioning ahead of the much-anticipated U.S. NFP release, which could shape September Fed policy expectations, along with ongoing challenges to Fed independence.

Later in the week, crude oil started marching to the beat of its own drum when rumors swirled that OPEC+ was considering another production boost. This was followed by reports confirming that the cartel actually pumped more barrels of oil than expected, with the API and EIA inventory figures also posting surprise gains in stockpiles to further stoke oversupply fears.

The spotlight shifted on Thursday to U.S. leading jobs indicators as the NFP release drew closer, with majority of reports (JOLTS job openings, Challenger job cuts, ADP non-farm employment change, and ISM services PMI) hinting at a softer increase in hiring, keeping the dollar torn between safe-haven flows and dovish Fed expectations.

Friday’s trading was dominated by very weak employment data from both the US and Canada. US payrolls only added just 22,000 jobs in August (well below the 75,000 forecast), and previous month’s numbers were revised lower significantly by a net -21K between June and July.  The disappointing jobs report triggered a Dollar selloff and collapse in bond yields, supporting gains in counter currencies like AUD & CHF. Canada joined the disappointing jobs party, sharing that it lost a massive 65K jobs, significantly raising the odds of a September BOC rate cut and crashing CAD in the process.

With a mixed and unusual broad market environment, it was a tough call between AUD/USD and AUD/CAD on which had the best potential for a net positive outcome. Ultimately, we thought BOTH were good options with broad market influences being less of a weight on market behavior. 

AUD/USD: Net Bullish AUD Event outcome + Risk-On Scenario = Arguably good odds of a net positive outcome

First, let’s touch on the AUD/USD discussion. This setup played out pretty well, as the pair was hovering around the target entry area leading up to the GDP release and was able to find support at the technical levels highlighted (Pivot point, Fibs, and moving averages) when the event turned out in favor of further AUD upside.

Prior to the event, price had dipped to the S1 (.6480) Pivot support area / 0.6500 major psychological support, then bouncing to the Pivot Point level (0.6520) ahead of the GDP event.

Stronger-than-expected Australian growth figures eventually hit the wires to likely bring in fundamental buyers, likely a contributor to taking the pair up to the 0.6550 minor psychological resistance in the sessions that followed, but falling short of the swing high. A reversal back to the downside hit AUD/USD on Thursday, likely driven by the rebound in the Greenback, taking the pair back to the pivot point level, where it found support once again.

On Friday, the widespread U.S. dollar sell-off propelled AUD/USD sharply higher, allowing it to blast through the R1 Pivot Resistance area and previous resistance levels to touch highs not seen since early August. The combination of a fundamentally strong Aussie and a fundamentally weak U.S. dollar made this the standout performer.

AUD/CAD 1-hour Forex Chart by TradingView

This AUD/CAD setup also deserves a spot in our eligible plays for the week, given how overall market sentiment and risk correlations have been in flux ahead of the event and afterwards.

While the pair already dipped below the shallow pullback support area discussed in the watchlist, our analysts were able to pinpoint potential crude oil weakness that could keep the bullish scenario in play. Besides, AUD/CAD also kept its head above the ascending trend line that likely served as the line in the sand for an uptrend correction, attracting bulls at S1 (.8960) before a more sustained rally followed.

The pair was able to find its way back within the area of interest ahead of the Australian GDP release, which then triggered a bounce back to the swing high in the session’s that followed. Bearish crude oil developments, including the OPEC+ rumored production boost and oversupply concerns were very likely big fundamental contributors, possibly helping take the pair past R2 (.9020) and allowed it to stay afloat above R1 (.9010) even after another pullback.

The rally went into overdrive on Friday. A catastrophic Canadian employment report, which showed an unexpected loss of 65,500 jobs, decimated the loonie. This coincided with broad risk-off sentiment following the weak U.S. jobs data. The combination sent AUD/CAD soaring, blowing past all resistance levels and making it one of the week’s strongest trending pairs. The outcome was a confluence of Aussie strength, oil price weakness, and a dramatic collapse in the Canadian dollar, all resulting in a roughly 72 pip gain (110 pip gain at peak) post Australian GDP release for the bulls.

Not Eligible to move beyond Watchlist – Bearish AUD Setups

GBP/AUD: Net Bearish AUD Event Outcome + Risk-On Scenario

GBP/AUD 1-hour Forex Chart by TradingView

The GDP beat invalidated this bearish AUD setup. At the time of our original discussion, this pair appeared ready to break above its short-term descending trend line.  But leading up to the Australian GDP release, GBP/AUD broke down even further, before the outcome of the event did not favor Aussie bears, lowering the odds of a successful upside reversal.

But GBP/AUD did actually rebound despite the bullish Australian GDP event, most likely due to a strong bullish reversal in sentiment in the pound, likely a reaction to optimistic comments from both UK Finance Minister Reeves and BOE Governor Bailey on Wednesday. From there GBP/AUD,  stabilized and traded mostly sideways (with slight bearish lean), as broad market sentiment and their roles as beta currencies likely took back control over both Sterling and the Aussie.

AUD/CHF: Net Bearish AUD Event outcome + Risk-Off Scenario 

AUD/CHF 1-hour Forex Chart by TradingView

Even with periodic safe-haven flows that should have favored the Swiss franc, Australia’s stronger growth prospects kept AUD/CHF supported above key levels. Stronger-than-expected Australian GDP data led to a break above the near-term resistance zone our analysts were eyeing ahead of the report. However, the pair still struggled to sustain its move higher immediately after the event since risk sentiment appeared to favor safe-haven currencies then.

Weaker-than-expected Swiss CPI eventually gave the breakout some legs, taking AUD/CHF in for a test of R1 (.5260) before retreating back to the broken resistance level, as traders likely squared away positions leading up to the high-impact NFP release.

The terrible U.S. NFP report on Friday triggered a massive flight to safety, re-establishing the Swiss franc’s role as the ultimate safe-haven currency. This surge in demand for the franc caused a sharp drop in AUD/CHF, erasing earlier gains. The pair’s price action became a tug-of-war between Australia’s strong fundamentals and the franc’s unparalleled appeal during times of market panic.

The Verdict

Australia’s upside GDP surprise supported the possibility of further AUD gains, continuing the Land Down Under’s streak of positive data that weighed on RBA rate easing hopes. And given the unusual broad market environment, we thought AUD/USD and AUD/CAD were both great candidates to move on from the Watchlist stage to the planning stage, and possibly live exposure / trading stage.

And fortunately for both, the net outcomes for a bullish lean were likely net positive given that both pairs closed the week well above both discussion levels and post event levels.

Now, given the number of top tier events & news flow, and the choppiness of price action in both pairs, more notably in AUD/USD, the planning and execution of a trading strategy would have likely been a factor in the outcome.  But once again, with the markets notably higher on the week, odds are pretty strong of a net positive outcome for the bulls.

With that being the case, we rated the watchlist discussions as “highly likely” of supporting a net positive outcome.

Key Takeaways: