AUD/USD: Better bid despite weak rebound in Aussie retail sales

AUD/USD is keeping gains despite the weaker-than-expected Aussie retail sales data.
The pair may extend gains on dovish Federal Reserve expectations.
RBA's Financial Stability Report cites housing market as key risk to economy.

Omkar Godbole FXStreet Contributor

AUD/USD is keeping gains despite the weaker-than-expected Aussie macro data released soon before press time

Consumer spending, as represented by August retail sales, came in at 0.4%, narrowly missing the expected 0.5% rise, having dropped by 0.1% in August, the Australian Bureau of Statistics data released at 01:30 GMT showed.

So far, the weaker-than-expected rebound in retail sales has not had any negative impact on the Aussie dollar. As of writing, the AUD/USD pair is trading around 0.6750 – down just five pips from the session high of 0.6756 seen before the retail sales release.

Aussie’s resilience could be associated with the increased odds of an October Federal Reserve rate cut. As of now, more than 90% of traders are pricing in the chance of a third, 25-basis point rate cut at the Fed’s Oct. 30 meeting, according to the CME’s FedWatch tool. The probability stood at 40% on Monday.

Further, the Reserve Bank of Australia’s Financial Stability Review, released at 01:30 GMT, offered little negative surprises. The report cited housing market, uptick in the jobless rate and the slowdown in the income growth as key risks to Australia’s economy. All these negatives are generally accepted and priced in by now.

Looking ahead, the AUD/USD pair may continue to rise, having charted a bullish Doji reversal pattern on the daily chart earlier this week. Also, the dovish Fed expectations will likely keep the pair better bid.

Technical levels

AUD/USD

Overview
Today last price	0.6753
Today Daily Change	0.0011
Today Daily Change %	0.16
Today daily open	0.6742

Trends
Daily SMA20	0.6801
Daily SMA50	0.679
Daily SMA100	0.6874
Daily SMA200	0.6989

Levels
Previous Daily High	0.6754
Previous Daily Low	0.6702
Previous Weekly High	0.6806
Previous Weekly Low	0.6738
Previous Monthly High	0.6895
Previous Monthly Low	0.6687
Daily Fibonacci 38.2%	0.6734
Daily Fibonacci 61.8%	0.6722
Daily Pivot Point S1	0.6711
Daily Pivot Point S2	0.668
Daily Pivot Point S3	0.6659
Daily Pivot Point R1	0.6764
Daily Pivot Point R2	0.6785
Daily Pivot Point R3	0.6816

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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