RETAIL SALES OVERVIEW
On Wednesday morning at 01:30 GMT, Australia’s seasonally adjusted Preliminary data on retail sales. Market consensus showed the seasonally adjusted month-on-month figure was unchanged at 0.2%, pointing to less pressure on the Reserve Bank of Australia (RBA) to act faster to curb inflationary woes.
Don’t forget market sentiment given the latest hawkishness from the Reserve Bank of Australia (RBA) was a surprise despite recent soft Australian inflation data and mixed comments from RBA officials Challenges ahead, today’s Australian retail sales data appears to be crucial for AUD/USD traders.
How does it affect AUD/USD?
AUD/USD remains under pressure around 0.6650, retreating from one-week highs, consolidating gains from the Reserve Bank of Australia. In doing so, the AUD pair bears the burden of subdued sentiment and market caution ahead of key data/events.
That said, the recent fears surrounding a recession in Australia due to higher interest rates than in the US may also seek validation from today’s Australian retail sales data. As such, a resurgence in key data could allow AUD/USD buyers to extend recent gains to break through near-term technical barriers, while an unlikely negative surprise could recall AUD pair buyers by emphasizing hawkish Fed concerns.
However, it is important to note that the AUD/USD pair may see a knee-jerk reaction to the April ISM services sector as traders are more interested in the US ADP employment change PMI and Federal Open Market Committee (FOMC) monetary policy meeting announcement.
Technically, the daily close surpassed the descending resistance line from three months ago, around 0.6720 at press time, as AUD/USD buyers regained control necessary condition.
AUD/USD pares RBA-inspired gains below 0.6700 ahead of Aussie retail sales, Fed
AUD /USD Forecast: Limited upside after failing to hold above 0.6700
on Australian retail sales
Published by The Retail Sales, the Australian Bureau of Statistics surveys what retailers sell based on a sample of retail outlets of different types and sizes, and is considered an indicator of the pace of economic development in Australia. It shows how the retail industry is performing in the short and medium term. Positive economic growth signals a bullish trend for the Australian dollar, while low readings are considered negative or bearish.
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