AUD/USD: China's record low investment growth could cap upside in the AUD

  • China Aug investment growth falls to new record low, industrial output, retail sales up
  • The dismal investment growth could put brakes on the AUD/USD rally, set in motion by the renewed hopes of the US-China trade talks.   

The AUD/USD pair is on the defensive, courtesy of the bearish divergence of the hourly chart relative strength index (RSI) and may suffer a temporary intraday pullback, courtesy of China's record low investment growth.

At press time, the pair is trading largely unchanged on the day at 0.7187. 

The data released a few minutes ago showed fixed-asset investment growth slowed to a record low of 5.3 percent in the first eight months of the year, missing the estimate of 5.5 percent.

However, industrial output grew 6.1 percent in August from a year earlier, and retail sales rose 9.0 percent, both beating expectations.

The drop in the fixed-asset investment could accentuate the impact of the bearish RSI divergence on the hourly chart, although the dip will likely be short-lived as the uptick in retail sales (or consumption) indicates that domestic demand is cushioning China's economy against the external shocks.

Further, the renewed hopes of the US-China trade talks are likely to keep risk assets well bid.

AUD/USD Technical Levels

Resistance: 0.72 (psychological level), 0.7229 (previous day's high), 0.7256 (61.8% Fib R of 0.7362/0.7085)

Support: 0.7159 (200-hour MA), 0.7144 (Sep. 5 low), 0.7085 (weekly low)

15M Strongly Bearish Neutral High
1H Bearish Neutral Low
4H Bullish Neutral High
1D Bullish Neutral Expanding
1W Bearish Oversold High


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.