AUD/USD drops to lowest since Jan. 4 on below-forecast Aussie Q4 GDP

• A weaker-than-expected Aussie Q4 GDP reading is pushing AUD/USD lower. 
• The dismal data validates RBA's recent decision to move away from long-held tightening bias and could force the central bank to adopt a dovish language. 

The offered tone around the Aussie dollar strengthened, pushing AUD/USD down to 0.7052 - the lowest level since Jan. 4 - after the Aussie Q4 GDP reading printed below estimates. 

The data released by the Australian Bureau of Statistics soon before press time showed the economy expanded 0.2 percent quarter-on-quarter in the fourth quarter, missing the forecast of 0.3 percent growth. The annualized growth rate cooled to 2.3 percent from the previous quarter's print of 2.8 percent. 

A below-forecast GDP validates RBA's recent decision to drop its long-standing prediction that next move in interest rates was likely to be upwards. 

As a result, the Aussie dollar took a hit immediately after the release of the dismal data and could test the support at 0.7021 (Oct. 26 low) in the next few hours. 

Technical Levels