AUD/USD sticks to dismal Aussie GDP-led weakness, struggles near 2-month lows

   “¢   Disappointing Aussie GDP growth figures prompt some aggressive selling.
   “¢   The prevalent bullish sentiment around the USD adds to the bearish pressure.
   “¢   Technical selling below 0.7070-65 horizontal zone aggravated the downfall.

The AUD/USD pair held on to the dismal Aussie GDP-led weakness and is currently placed at the lower end of its daily trading range, or two-month lows.

After yesterday’s directionless trading action, the pair came under some intense selling pressure and extended its recent rejection slide from the 0.7200 round figure mark in wake of disappointing GDP growth figures.

Data released this Wednesday showed that Australian economic growth decelerated further and stood at 0.2% q/q rate in the December quarter, with the yearly rate also cooling to 2.3% as compared to 2.8% previous.  

The readings fell short of market expectations and fueled speculations over a possible RBA rate cut this year, which eventually turned out to be one of the key facotrs that prompted some aggressive selling around the Australian Dollar.  

The major was further pressurized by the prevalent US Dollar bullish sentiment, backed by the overnight release of better than expected economic data and the recent rally in the US Treasury bond yields.  

Adding to this, possibilities of some short-term trading stops being triggered on a sustained weakness below the 0.7070-65 horizontal zone seems to have further aggravated the bearish pressure.

Moving ahead, market participants now look forward to the release of US ADP report on private sector employment for some short-term impetus ahead of another batch of Aussie macro releases on Thursday.  

Technical levels to watch