GDP has bounced back in Australia and that will likely be a boost to sentiment for the AUD/USD.

We already saw risk assets on the rise overnight and the Aussie is quickly closing in on that 0.7400 level. Today’s GDP print, that came in at 3.3% vs 2.6% expected, will add to the bull case for now.

As we know, the definition of a recession is two periods of negative economic growth. Australia had been recession free for decades thanks largely to the mining sector and a heavy policy of migration, but with the lockdowns this year, the economy ground to a halt and saw a sharp contraction as you might expect.

Fortunately, most of the country is now back to normal as COVID cases are largely under control. Borders are now almost all reopened and things are getting back to business as usual.

This is clearly being reflected in the better than expected GDP print and does bode well going forward.

Looking at the technicals a bit more closely and we can see that 0.7400 is certain to be massive resistance once again. While price did jump early on, those gains have slowly faded away as risk assets have been retracing over the course of the morning in Asia.

Yesterday, we did see the 0.7350 level really holding up strongly as support and even though price did breakthrough for small periods, there was plenty of buying interest. This can now really set us up and it’s possible to simply trade with the momentum on a break of either level.

I think the bull case remains strong, so if price does pullback to that support level, look for a higher low and buying in that area as well.

Otherwise, we can look to trade the breaks.