The National Bureau of Statistics of China will release its quarterly Gross Domestic Product (GDP) data at 02:00 GMT on Monday. GDP is expected to grow by 1.0% in the fourth quarter, down from 1.1% in the third quarter. Year-over-year, the economy is predicted to expand by 4.4%, a drop from the previous 4.8% growth. Retail sales are projected to rise by 1.2% year-over-year in November, slightly lower than the 1.3% from the last report. Industrial production is expected to increase by 5.0% YoY for the same period, up from 4.8%.

AUD/USD Performance

The upcoming data releases have negatively impacted the AUD/USD, as the pair has weakened alongside a stronger US Dollar. Any changes in the GDP data could affect the Australian Dollar’s movements against the US Dollar. If the data is better than expected, the AUD might strengthen. Conversely, if the figures are worse, it could apply more downward pressure. Support and resistance levels show where the price may move, with current prices approaching recent support. GDP figures significantly influence currency values and reflect the economy’s health. Typically, higher GDP leads to inflation, which can prompt central banks to change interest rates, thereby affecting currency strength. As China’s Q4 GDP data is set to be released today, January 19th, we should be ready for immediate changes in the AUD/USD pair. The market expects a slight slowdown to 1.0% growth, so any changes from this forecast could trigger a significant movement. Traders should pay close attention to the 02:00 GMT release time. If the data is better than expected, the Australian Dollar may strengthen, easing fears about the economic slowdown observed in 2025. This could create an opportunity to trade towards the first resistance level of 0.6710. A surprisingly strong industrial production report would further support this positive outlook for the Aussie.

Currency Movements and Market Impacts

On the other hand, if the GDP figure falls below the 1.0% expectation, it would confirm the slowdown and likely push AUD/USD lower. This weakness would be worsened by the strong US Dollar, placing immediate risk on the support level at 0.6663. Such a miss would deepen concerns about China’s property sector, which affected markets last year. It’s important to note that this data comes after a tough 2025, when signs showed China’s recovery from the pandemic was faltering. The Reserve Bank of Australia, which has kept its cash rate at 4.35% since late 2023, is monitoring this closely. Ongoing weakness from China, its largest trading partner, could change its policy outlook, making the AUD more sensitive to any negative surprises from today’s report. The recent momentum of the US dollar is also a crucial factor that will impact the pair in the coming weeks. A strong US jobs report for December 2025 showed the economy added over 216,000 jobs, leading the market to expect Federal Reserve rate cuts no sooner than June. This underlying strength in the dollar poses a significant challenge for AUD/USD, even if the Chinese data is positive. For those expecting a positive surprise, short-dated call options could be used to take advantage of a potential spike in AUD/USD while managing risk. If disappointment is expected, put options provide a way to profit from a decline toward the December 2024 lows near 0.6614. Implied volatility will likely rise around the release, so positions should be planned carefully. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now