When is Australia Retail Sales and how could it affect AUD/USD?

Retail Sales overview

Early Wednesday, the market sees preliminary readings of the Australia Retail Sales for June month at 01:30 GMT. Market consensus suggests a downbeat MoM print of -0.5% versus 0.4% prior readings.

Given the RBA policymakers’ firm rejection to rate hike before 2024, coupled with the recent lockdowns in Australia, keep AUD/USD bears hopeful. However, the RBA’s asset purchase alteration prevails and could tease policy hawks on positive surprise. Hence, today’s Aussie Retail Sales data will be the key for AUD/USD traders.

Ahead of the data, Westpac said,

The full impact of Victoria's restrictions will hit this survey. The lockdown in Sydney and another round of mini–lockdowns across multiple jurisdictions (QLD, WA, NT and VIC again) won’t hit until July. 

On the same line, TD Securities said,

We anticipate Melbourne's 14-day lockdown will weigh on discretionary spending and ultimately the preliminary print, which should drop 0.8%. The final print to be released on 4th Aug is likely to reflect the start of Sydney's lockdown, so it could be weaker. As a guide, the preliminary print for May was +0.1% m/m.

How could it affect AUD/USD?

AUD/USD extends bounce off yearly low, snapping four-day downtrend, as market sentiment improves ahead of the key Australia data. Behind the moves could be the headlines concerning US stimulus, as well as fresh support for the global central banks’ easy money policies due to the latest Delta covid variant outbreak. Also on the positive side could be lesser than the previous fall in Westpac Leading Index for Australia as the sentiment gauge recovered to -0.1% MoM versus -0.6% prior.

That said, the fact that over 50% of Australia is under lockdown and there some states jostling with the virus-led activity restrictions for a long. The early indicators also suggest downbeat prints of Retail Sales, which in turn favor AUD/USD sellers to aim for a fresh yearly low despite the latest corrective pullback. Though the market reaction turns out to be more in case of positive surprises and hence caution is required before the data release.

Technically, Bears need a daily closing below 0.7340, comprising tops marked in September–November 2020 to October 2020 high near 0.7245. On the contrary, recovery moves require 0.7410-15 breakout, including late 2020 peak and early July 2021 low, to be considered promising.

Key Notes

AUD/USD: Bearish impulsive remains intact above 0.7300 ahead of Aussie Retail Sales

AUD/USD Forecast: Australian lockdowns add to the bearish case

About Australian Retail Sales

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.