• AUD/USD pulled back slightly on Wednesday as weaker-than-expected Australian Q1 GDP data that confirmed the economy remains on a sluggish growth path.
• Australia's economy barely grew in Q1 as cautious consumers and stalled government spending highlighted the need for more policy support.
• Australia's real GDP grew just 0.2% in Q1, down from 0.6% in Q4 and below the 0.4% forecast, according to ABS data.
• Weak data boosted expectations of RBA rate cuts, with markets pricing an 80% chance of a July cut.
•Despite the growth miss, AUD/USD continues to display resilience on the charts, extending a pattern of higher highs and higher lows, and importantly, holding above its 200-SMA at 0.6439 — a key marker of bullish momentum.
• Immediate resistance is located at 0.6502(23.6%fib), any close above will push the pair towards 0.6513(Higher BB).
• Support is seen at 0.6439 (200SMA) and break below could take the pair towards 0.6433(38.2%fib).
Recommendation: Good to buy around 0.6450 with stop loss of 0.6360 and target price of 0.6560
