- 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)
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