AUD/USD surrenders upbeat Aussie GDP-led gains, back near 20-month lows

   •  Stronger than expected Australian GDP provides a temporary respite to the bulls.
   •  US-China trade tensions/persistent USD strength prompt fresh selling at higher levels.

The AUD/USD pair surrendered the majority of its early gains to levels beyond the 0.7200 handle and has now dropped to the lower end of its daily trading range. 

Today's stronger than expected Australian GDP print, showing that the economic growth stood at 0.9% in the second quarter of 2018, provided a strong boost to the domestic currency. 

The post-data uptick, however, turned out to be short-lived and quickly ran out of steam near the 0.7220 region, with a combination of negative forces keeping a lid on any further up-move.

Deadline for new US tariffs on additional $200 billion worth of Chinese imports was set to end on Thursday and growing trade-war fears continued weighing on the China-proxy Australian Dollar. 

Adding to this, the US Dollar remained supported by Tuesday's upbeat release of ISM manufacturing PMI and global safe-haven flows, which further collaborated to the pair's intraday retracement of around 40-45 pips. 

The price action clearly seems to suggest that the near-term bearish pressure might still be far from over, despite oversold conditions on the daily chart. Hence, the pair remains vulnerable to extend the well-established downtrend amid absent market moving economic releases from the US. 

Technical levels to watch

The 0.7155-50 region remains an immediate support to defend, which if broken might turn the pair vulnerable to head towards testing the 0.7100 round figure mark. On the flip side, the 0.7200 handle, closely followed by the 0.7215-20 region now seems to have emerged as an immediate resistance, above which the pair is likely to head back towards testing the 0.7245-50 supply zone.