FxWirePro: AUD/USD fails to extend bullish gap open, slips lower on unexpected drop in Q4 inventories

AUD/USD chart on Trading View used for analysis

• AUD/USD opened with a bullish gap in the early Asian session.
   
• The pair however failed to extend gains after an unexpected drop in Q4 inventories data dented the Aussie.
   
• Australia’s Q4 business indicators data were weaker than anticipated, with profits, inventories and wages all below their forecasts. 
   
• Inventories were surprisingly weak at -0.2% q/q, which suggests that private non-farm stocks will make no contribution to Q4 GDP growth.
   
• A disappointing fourth quarter GDP reading could further validate RBA's decision to put rate cuts back on the table. 
   
• Focus now on RBA policy meeting due Tuesday for further impetus. 

Support levels - 0.7070 (trendline and cloud), 0.7037 (Lower BB), 0.7021 (Oct 26 low)

Resistance levels - 0.7117 (5-DMA), 0.7147 (55-EMA), 0.7185 (110-EMA)

Call update: Our previous call (https://www.econotimes.com/FxWirePro-AUD-USD-Trade-Idea-1504363) has hit all targets.

For details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.