Australia’s run of official data for November continued today with Retail Sales for the month of November, Month on Month (MoM).
Data arrived as follows
+0.9 vs +0.4 (expected) and 0% prior. (AUD rallies 15 pips at the time of writing).
"The 0.0% MoM headline reading in Oct was another disappointment given the middle-income tax rebates that came into effect on 1 July, especially with the detail showing spending on discretionary items (e.g. clothing & apparel, household goods and department stores) was negative,"
– analysts at Westpac explained, adding that the consensus for Nov was 0.4%mth, "if only thanks to a rebound from Oct and the growing popularity of “Black Friday” sales which could see Nov benefit at the expense of Dec."
The Retail Sales released by the Australian Bureau of Statistics is a survey of goods sold by retailers is based on a sampling of retail stores of different types and sizes and it's considered as an indicator of the pace of the Australian economy. It shows the performance of the retail sector over the short and mid-term. Positive economic growth anticipates bullish trends for the AUD, while a low reading is seen as negative or bearish.
"The AUD/USD pair is at the lower end of its latest consolidative range, which keeps the risk skewed to the downside," Chief analyst at FXStret explained, adding, " ... a break below the level," (0.6480), will be "indicating a downward extension toward 0.6770.
Technical readings in the 4-hour chart favor such decline as the pair is now developing below all of its moving averages, as the RSI indicator consolidates at around 31."
However, the data was quite encouraging in the face of everything bearish for the currency, both technically and fundamentally. The price has jumped to the 50-hour moving average within a broader bearish trend. The price is now above the downside trendline on the hourly chart but far from being in the clearings of the bearish woodland.
Moreover, the bushfires in Australia roar on and the market sentiment is calling for the Reserve Bank of Australia to cut rates. Markets are pricing a 50% chance of easing at the Feb RBA meeting, according to analysts at Westpac. This move may well be sell-on rallies at this juncture. With Nonfarm Payrolls on the horizon, traders will be both cautious of fighting the trend into the data and weekend. Next week's meeting between the US and Chinese officials will be crucial for markets as they intend to sign a phase-one deal – a probable support for the Aussie which trades as a proxy to the trade wars.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.