Retail Sales Overview
Early Friday, around 01:30 AM GMT, the market sees preliminary readings of Australia's seasonally adjusted Retail Sales for April month. Market consensus suggests an easing in the seasonally adjusted monthly print to 0.2% MoM from 0.4% prior, indicating more headwinds for the pressure Reserve Bank of Australia (RBA), especially after the Reserve Bank of New Zealand’s dovish hike.
Given the less impact of the Reserve Bank of Australia's (RBA) latest hawkish surprise, as well as fresh talks of policy pivot in Australia and New Zealand, not to forget the mixed comments from the RBA officials, today’s Aussie Retail Sales data appears crucial for the AUD/USD traders.
How could it affect AUD/USD?
AUD/USD stays pressured at the lowest level in six months around 0.6500 as it braces for the downbeat Aussie data during early Friday. In doing so, the Aussie pair also bears the burden of the sour sentiment and the market’s cautious mood ahead of the key data/events.
That said, the recent chatters surrounding the Aussie recession, as well as receding monetary policy divergence between the RBA and the Fed, may seek validation from today’s Aussie Retail Sales data. Hence, recovery in the key statistics may allow the AUD/USD to lick its wounds at the yearly low.
It should be noted, however, that the Aussie data may have a knee-jerk reaction for the AUD/USD pair as traders are more interested in the US Durable Goods Orders for April and the Core Personal Consumption Expenditure (PCE) Price Index for the said month, known as the Fed’s preferred inflation gauge, not to forget the debt ceiling negotiations. Hence, even if the data posts any positive surprise, which is highly unlikely, the market reaction to the same will be short-lived.
Technically, a daily closing below the 0.6550 support confluence, now resistance, joins the bearish MACD signals to keep the AUD/USD sellers hopeful. That said, a downward-sloping trend line from late November 2022 and a 61.8% Fibonacci retracement level of the pair’s run-up from October 2022 to February 2023 constitute the 0.6550 key upside hurdle.
Key Notes
AUD/USD Price Analysis: Bears keep the reins near 0.6500 ahead of Aussie Retail Sales
AUD/USD Forecast: No respite for the Aussie in a risk-averse environment
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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