AUD/USD Forecast: Dual Chinese downers choke any recovery

• AUD/USD is trading around 0.7150, limited by Chinese news. 
• US GDP and further US data are eyed.
• The technical picture is worsening for the pair.

AUD/USD trades in the mid-0.7100s, struggling to recover. Worries come from China, Australia's No.1 trading partner. The official Chinese purchasing managers' indices both missed expectations with the manufacturing PMI contracting for the third consecutive month. Chinese industry imports Australian metals, so the forward-looking data are worrisome.

The second downer is related to China but comes from Washington. US Trade Representative Robert Lighthizer testified on Capitol Hill and said that China needs to agree on structural changes and enforcement. Buying US goods is not enough. The ongoing trade war weighs on China and on the global economy.

These developments around the world's second-largest economy countered upbeat Australian Capital Expenditure numbers. Capex grew by 2% in Q4, above expectations. The Reserve Bank of Australia watches this investment data closely, and it also feeds into next week's GDP data.

The focus now shifts to the US GDP, which carries expectations of a slowdown, but with a high dose of uncertainty. 

See: US Fourth Quarter GDP: What hath retail sales wrought?

Later, end-of-month sessions could cause some jitters, before the focus shifts to the Chinese Caixin Manufacturing PMI. The independent measure of the economy has shown worse numbers than the official ones but expectations are already low. The publication should be closely watched by Aussie/USD traders.

AUD/USD Technical Analysis

AUD/USD slipped below the 50 Simple Moving Average on the four-hour chart, after losing the 200 SMA beforehand. In addition, Momentum is flirting with negative territory. The technical picture has worsened. 

Support awaits at 0.7125 that was the low point of the day. 0.7102 was a swing low in mid-February and 0.7070 is the next line to watch after it was a swing low later in the month.

0.7168 was a swing high earlier in the day and it is followed by the round number of 0.7200 that capped the pair on Wednesday. The round number is backed by the swing high of 0.7208.