FxWirePro: AUD/USD softens despite reasonably solid Australia GDP data

• AUD/USD  slipped lower on Wednesday  as the fallout from war in the Middle East offset better-than-expected domestic GDP figures.

•Markets fell again on Wednesday as inflation fears rose after U.S. and Israeli strikes on Iran, driving investors toward safe heaven US dollar .
• Australia’s economy grew at its fastest annual pace in nearly three years in the December quarter, reigniting inflation concerns and raising expectations for higher interest rates to control demand.

•  Data from the Australian Bureau of Statistics showed real gross domestic ​product (GDP) rose 0.8% in the fourth quarter, above an upwardly revised 0.5% the previous quarter. Analysts this week had upgraded their forecasts to around 1.0%.

• Annual growth accelerated to 2.6%, the fastest pace since early 2023 when post-pandemic stimulus was still being felt.

• RBA Governor Michele Bullock on Tuesday warned another rate rise was possible this month given the policy board was worried that inflation expectations could become unanchored.

•  Immediate resistance is located at 0.7037(38.2%fib), any close above will push the pair towards 0.7070 (SMA 20).

•  Support is seen at 0.6973 (Lower BB) and break below could take the pair towards 0.6946(50%fib)

Recommendation: Good to sell around 0.7000 with stop loss of 0.70100, and target price of 0.6930