Uptick in China money supply figure could lift AUD/USD

• China data - retail sales, industrial production and fixed asset investment - missed estimates.
• China money supply rose more than expected and could boost risk sentiment, helping AUD/USD post stronger corrective rally.

An above-forecast China M2 money supply number could help the AUD put on a good show today.

The official data released a few minutes ago showed the M2 money supply rose 8.5 percent year-on-year in July, beating the estimated rise to 8.2 percent from the June's print of 8.0 percent.

Meanwhile, new loans also exceeded expectations by printing at 1,450 billion, but the actual print was well below the previous month's figure of 1,840 billion.

An uptick in the money supply indicates China is pumping more money into the economy to help absorb shocks arising from the trade war with the US. As a result, risk assets and China proxies like the AUD could find takers.

However, the upside could be limited, courtesy of Turkey crisis and below-forecast China retail sales, industrial production and fixed asset investment figure.

At press time, the AUD/USD is trading at 0.7275 - largely unchanged after China data release.

AUD/USD Technical Levels

Resistance: 0.7293 (daily pivot resistance 2), 0.7329 (5-day moving average), 0.7361 (10-day moving average)

Support: 0.7256 (previous day's low), 0.7231 (daily pivot support 1), 0.72 (psychological level)