AUD/USD: Break above 0.72 elusive as Aussie construction data disappoints expectations

• AUD/USD sheds few pips following the release of below-forecast Aussie construction work done data. The number will feed directly into the Q4 GDP, due next week. 
• The downside could be limited, courtest of dovish Fed and Brexit optimism. 

AUD/USD has backed off from highs near 0.72 seen a few minutes ago on dismal Aussie construction data. 

At press time, AUD/USD is trading at 0.7185, having clocked a high of 0.7199 in the overnight trade. 

Australian Q4 Construction work done came in at -3.1 percent, missing the forecast rise of 0.5 percent by a big margin. The activity had contracted by 3.6 percent in the previous quarter. 

The data will feed directly into Australia's fourth-quarter GDP, scheduled for release next week. Put simply, the surprise drop in construction work done will act as a drag on  GDP.

Even so, the downside in the Aussie dollar looks limited, courtesy of the dovish Fed and the uptick in British Pound. 

On Tuesday, Fed Chair Powell reiterated patience on rate hikes and took note of the risks to the US economy. Both treasury yields and the US dollar weakened after Powell's Congressional testimony and are likely to remain under pressure today. 

The falling odds of hard Brexit and the resulting rise in Sterling could also strengthen the bid tone around the AUD. 

Technical Levels