How to Trade the China GDP Report

If you have high hopes for the upcoming China GDP report, this strategist has a trade for you.

After weeks of worry about Chinese economic growth, investors seem to have decided to change their minds - and it's showing in both stocks and currencies.

"A lot of good positive mojo coming out of China right now," says Andrew Busch, global currency and public policy strategist for BMO Capital.

Busch told CNBC's Scott Wapner that the latest report on new yuan loans "soared," coming in well above expectations, and that report is usually a good predictor of GDP .

He was also impressed by the latest employment report from Australia, which came in well above expectations, and he says the talk of low interest rates in the U.S. and Japan suggest that the mood among currency traders is "risk on, baby."

The Australian dollar has been moving up sharply on the bullish sentiment, but Busch thinks it still has room to run. So if Chinese GDP comes in at 8.5% or higher, he wants to buy the Aussie against the dollar right around 1.035, setting a stop at 1.0225 and looking for a move to 1.0650.

You can watch the discussion on this video.

Tune In: CNBC's "Money in Motion Currency Trading" airs on Fridays at 5:30pm and repeats on Saturdays at 7pm.

Learn more: The essential vocabulary for currency trading is on Key Currency Terms. Top currency strategies are broken down for you in Currency Class.

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