AUD/USD turns neutral near 0.7170 ahead of China GDP

• Bulls turn cautious, capped below 0.7200 ahead of China data dump.
• Holiday-thinned markets to exaggerate the moves, as US government shutdown remains a major risk for the greenback.

Having witnessed some choppiness in the overnight trades,  the AUD/USD enters a phase of come in early Asia, trading modestly flat near the 0.7170 region, with the bias leaning towards the downside heading into the Chinese data flow due on the cards at 0200 GMT.

The Chinese GDP report is likely to show the economic growth to have slowed down to 6.4% in Q4 2018 versus 6.5% previous while the industrial production is also expected to ease a bit to 5.3% versus 5.4% last.

However, the downside appears cushioned so far this session, as the USD bulls take a breather after Friday’s rally, fuelled by higher Treasury yields amid improved risk sentiment. The 10-year Treasury yields hit three-week highs near 2.79% while the US dollar reached two-week tops at 96.39 across its main competitors. At the press time, the USD index consolidates near 96.30/35 levels.

Looking ahead, the Chinese macro data remain a major risk to the Aussie dollar amid looming China slowdown fears while the sentiment around the buck could be weighed down by the US government shutdown, as the holiday-thinned light trading could exaggerate the price movement. The US markets are closed today in observance of Martin Luther King Day.

AUD/USD Technical Levels