Annual GDP in Australia looks like it is on the increase after posting 1.7% growth YoY.

The news seems to support the idea that the economy has reached a ‘gentle turning point’ as suggested by the RBA.

That said, QoQ GDP missed the mark coming in at 0.4%. So while there is positive news, in that GDP is up from record low levels, we are still a fair way off what the RBA would like to be seeing.

As such, the markets are still expecting to see another rate cut in February 2020, which would take the OCR down to 0.5%. The lowest since the 1950s.

At the same time, the AUD/USD has staged somewhat of a rally in recent times. But that’s not really been on the back of a strong Aussie economy, rather more USD worries. With Trump firing up the trade wars again, we’ve seen both equities and the Greenback decline and that has pushed the AUD into 0.6850.

The immediate response to the GDP print has been a little muted. The mainstream media will point to improving growth, however, the QoQ did miss.

As such the AUD/USD is falling away a touch, albeit slowly.

There are now a couple of key levels of note, with resistance at 0.6850 and resistance turned support at 0.6800 being the big one.

The trade wars will likely see the USD a little flat for a few weeks and it is now off its November highs.

I am still bearish on the Aussie and expect to see a fall away form 0.6850. Unless we get some significantly bad trade headlines in the next few days.

Otherwise, the focus will then fall back to more of the fundamentals, led by the week’s jobs report out of the US.