AUD/USD struggles to build on Chinese data-led uptick

   •  Mostly in-line Chinese data/US-China trade optimism provides a minor lift.
   •  Bulls failed to capitalize on the uptick despite a subdued USD price-action.

The AUD/USD pair struggled to build on its intraday modest uptick and was now seen oscillating within a 15-20 pips narrow trading band.

Having slipped to an intraday low level of 0.7150, the pair caught some bids and rallied around 30-pips in reaction to slightly better-than-expected Chinese macro releases, especially industrial production data for December. 

Meanwhile, retail sales and the fourth quarter GDP growth, which slowed to 6.4% q/y rate - the lowest since early 2009, were mostly in-line with expectations and provided a minor lift to the China-proxy Aussie.

Bulls, however, lacked conviction and seemed rather unimpressed by growing optimism over the US-China trade talks following Friday's report that China has offered a six-year path to eliminate trade surplus with the US.

Hence, it would be prudent to wait for a strong follow-through buying before traders start positioning for any further appreciating move amid absent relevant market-moving economic data and a bank holiday in the US.

Technical levels to watch

The 0.7150 region might continue to protect the immediate downside, which if broken might turn the pair vulnerable to accelerate the fall towards challenging the 0.7100 handle before eventually dropping to 0.7070-65 support area.

On the flip side, the 0.7190-0.7200 area is likely to act as an immediate strong hurdle, above which bulls are likely to lift the pair further towards last week's swing high, around the 0.7235-40 heavy supply zone.