Retail Sales Overview
Early Wednesday, the market sees preliminary readings of Australia's seasonally adjusted Retail Sales for August month at 01:30 GMT. Market consensus suggests a downbeat MoM print of 0.4% versus 1.3% prior readings, suggesting the lack of sustained improvement in economic activity after a surprise jump in July.
Given the recently mixed Aussie data and the Reserve Bank of Australia’s (RBA) cautious mood, today’s Aussie Retail Sales appear the key for the AUD/USD traders.
Ahead of the data, Westpac said,
Card activity suggests that sales should begin to show a clearer ‘cresting’ in August (Westpac forecast: 0.0% MoM, median 0.4% MoM). Sales were well above expectations in July, up 1.3% MoM, 16.5% YoY.
How could it affect AUD/USD?
AUD/USD picks up bids to pare recent losses around the two-year low ahead of the key Aussie data. The reason could be linked to the light calendar and the traders’ preparations for the stated statistics. That said, Australia’s seasonally adjusted Retail Sales for June are expected to ease to 0.4% versus 1.3% prior, which in turn supports the latest pre-event rebound.
It should be noted that the RBA’s recent communication has been downbeat and could favor the AUD/USD bears if the actual Retail Sales outcome deteriorates in August. Also, the card spending data has already flashed signals favoring the pair’s further downside.
Technically, a clear downside break of the three-month-old symmetrical triangle hints at the AUD/USD pair’s south-run towards the 0.6100 threshold. During the fall, the 78.6% Fibonacci Expansion (FE) of April-August moves and the April 2020 low could test bears around 0.6365 and 0.6250 respectively. Alternatively, recovery remains elusive below 0.6710 support-turned-resistance.
About Australian Retail Sales
The Retail Sales released by the Australian Bureau of Statistics is a survey of goods sold by retailers based on a sampling of retail stores of different types and sizes and it's considered 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.
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