This will be a major week for the Australian dollar. From a political standpoint, traders will wait for the retaliatory statements from the Australian government after Trump signs in the new policy on steel and aluminum.

After this, traders will focus on the interest rate decision and the GDP numbers. On Tuesday, the Reserve Bank of Australia will complete its second meeting of the year and announce its interest rate decision. Based on the past statements by the RBA, traders expect the RBA to leave rates unchanged at 1.50%. Still, traders will wait for the statement from the RBA chair for their forward guidance.

Traders will then use the RBA’s guidance to interpret the GDP reading on Wednesday. The Australian Bureau of Statistics will release the GDP growth for the past quarter. Traders expect a QoQ GDP growth of 0.5% and an annualized growth of 2.5%.

As shown below, the Australian dollar fell from 0.7891 to a low of 0.7709. This was more about a strengthening dollar than a weakening AUD. This week, there are two likely scenarios. In the first one, the pair may continue going down, which could see it test the three-month low of 0.7700. This is the most likely scenario.

The second scenario is where the pair recovers and may move to the 0.78500 level.