AUD/USD Technical Analysis: Breakout attempt foiled by weak Aussie data

AUD/USD was offered at key falling trendline resistance earlier today, seemingly due to a weaker-than-expected Q4 inventories figure. 

Hourly chart

As seen above, the pair gapped higher in early Asia, possibly due to US-China trade optimism. 

The break above the trendline, however, was short-lived and the pair fell back to 0.7079, as indicated by the previous 60-minute candle, as Aussie Q4 inventories figure came in at -0.2 percent quarter-on-quarter, missing the estimate of 0.3 percent growth by a big margin. 

The unexpected drop in inventories indicates that the fourth quarter GDP reading could disappoint expectations, validating RBA's decision to put rate cuts back on the table. 

Further, that data has overshadowed the 28.6 percent rise in Aussie housing starts in January and a 0.1 percent rise in the TD securities inflation. 

As of writing, the AUD/USD pair is trading at 0.7089. The trendline hurdle could be scaled in the next few hours if the equities continue to cheer the increased odds of US-China trade deal. 

A trendline breakout, if confirmed, would allow a test of resistance at 0.7122 and 0.7138 (200-hour MA).