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

Retail Sales overview

Early Friday, the market sees preliminary readings of the Australia Retail Sales for October month at 00:30 GMT. Market consensus suggests an upbeat MoM print of +2.5% versus +1.3% prior readings, suggesting the sustained improvement in economic activity after positing the first positive figure in the last four months during September.

Given the recently strong inflation data crossing roads with the Aussie jobs report, not to forget the Reserve Bank of Australia’s (RBA) cautious optimism, today’s Retail Sales figures become all the more important for AUD/USD traders.

Ahead of the data, TD Securities said,

We expect retail sales to extend its turnaround in Oct, rising by 2.2% m/m (cons: 2.2%). The reopening in NSW should give a strong boost to spending but we are cautious on extrapolating overall strength as Vic's restrictions only began to ease towards month-end. Nonetheless, we are optimistic on the consumer spending outlook over the next couple of months as year-end celebrations are likely to boost sales while further easing of restrictions and opening of international borders could give another leg up to spending domestically.

How could it affect AUD/USD?

AUD/USD remains on the back foot around a three-month low amid a quiet Asian session ahead of the key data. While an off in the US and a light calendar challenges momentum traders, the RBA v/s Fed battle keeps the Aussie pair sellers hopeful. Also weighing on the quote could be the recent coronavirus woes and the Sino-American tussles.

The Reserve Bank of Australia’s (RBA) intent to wait for further details before announcing rate hike plans will join the Aussie data disappointment and fresh covid fears to weigh on the quote should the Retail Sales reverse the previous month’s expansion. However, the recent unlocks in Australia tame fears of any such downbeat figures. Hence, a corrective pullback can be witnessed if the scheduled figure arrive as better than expected.

Technically, a sustained trading below a three-month-old support line, now resistance around 0.7260, joins downbeat MACD signals and a bear cross of the 20-DMA to 100-DMA to keep AUD/USD sellers hopeful.

Key Notes

AUD/USD bears head towards Oct daily lows

AUD/USD Forecast: Lower lows hint at a new leg south towards yearly lows

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.