AUD/USD falters ahead of 0.7200 mark on dismal Aussie data/ modest USD rebound

   “¢   Disappointing Aussie Q4 construction data prompts some selling on Wednesday.  
   “¢   The USD bounces off 3-week lows and further collaborates towards capping.
   “¢   Downside remains cushioned amid the latest US-China trade optimism.

The AUD/USD pair stalled its recent positive momentum near the 0.7200 handle and is currently placed at the lower end of its daily trading range.  

The pair failed to capitalize on a three-day-old bullish trend and retreated a bit following the release of dismal Aussie construction data, showing an unexpected contraction of 3.1% during the fourth quarter of 2018. Adding to this, the previous quarter’s reading was also revised down to show a drop of 3.6% as compared to 2.8% fall reported earlier.  

This coupled with a modest US Dollar rebound from the lowest since Feb. 5, touched in the aftermath of a dovish message by the Fed Chair Jerome Powell’s testimony on Tuesday, further collaborated towards keeping a lid on any strong follow-through up-move for the major.

In his prepared remark for semi-annual testimony to Congress, Powell reiterated that the central bank would stay patient on monetary policy, which accompanied by growing optimism over a possible resolution to the long-standing US-China trade disputes might continue to lend support to the China-proxy Australian Dollar and help limit deeper losses, at least for the time being.  

Moving ahead, today’s US economic docket, highlighting the release of durable goods orders data for January, and the Fed Chair’s second appearance before the Congress will now be looked upon for some fresh impetus later during the early North-American trading session.

Technical levels to watch