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AUD/USD pressured on low investment

Investment continues falling in Australia.  Capital Expenditure (capex) dropped by 5.2% in Q1 2016,  much worse than a fall of 3.2% predicted. there is a small silver lining with an upwards revision of Q4 from a rise of 0.8% to 1.8%. Nevertheless, this isn’t good news.

The Reserve Bank of Australia looks at investment trends for its decisions, as the data has the same horizon as the RBA’s decision. Such data adds to the odds of a rate cut coming sooner than later.

The Australian dollar is not crashing against the dollar on the data, but  that’s due to some weakness in the greenback. Against other peers, the A$ is on the back foot.

Together with  worries about China’s very rapid credit expansion, things don’t look too positive for Australia this week.

Here is a 30 minute chart of AUD/USD,  showing how AUD/USD remains constrained in range: 0.7175 is the lower bound and and 0.7220 is the upper one. Strong support awaits at the recent low of 0.7140.

More: AUD bears are coming – 2 opinions.

AUDUSD May 26 2016 Capex hits hard

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.