When is the Australian Retail Sales and how could they affect AUD/USD?

Retail Sales overview

Early Friday, the market sees the preliminary reading for the July month Retail Sales data from Australia at 01:30 GMT. Following a 16.9% increase in May and a milder rise of 2.7% in June, markets are expecting another firm print as the period comprises of further easing of lockdown restrictions before numbers from Victoria recalled the stipulations. Considering the pre-pandemic period, the data could be considered having a short-term impact. Though, any disappointment will be enough to derail the Aussie buyers’ latest optimism.

Analysts at Westpac don’t turn down the market forecasts while saying:

Indicators such as card transactions point to a solid gain in sales ahead of the Victorian lockdown. Westpac predicts a 3.0% m/m rise, after 2.7% in June. Bear in mind that this series is overweight supermarket sales and underweight services such as hospitality and entertainment.

Elsewhere, the Australia and New Zealand Banking Group (ANZ) said:

Spending data suggests retail was broadly stable in July, as employment gains and more open economies stimulated retail spending, but the spending to facilitate working-from-home started to soften. Retail growth is unlikely to extend into August. Lockdowns in Victoria are likely to decrease spare household income, particularly as the reduction in JobKeeper and expiry of deferred mortgage payments loom. Victorians are likely to be already set up for work and play at home, reducing the likelihood of a repeat in the spike in household goods spending that offset the weakness in dining/fashion spending during the first lockdown.

How could it affect AUD/USD?

AUD/USD picks up bids to pierce 0.7200, currently around 0.7205, by the press time of Friday's Tokyo open. The aussie pair recently benefited from five-week low coronavirus (COVID-19) numbers from Victoria and mostly unchanged figures of Commonwealth Bank Manufacturing PMI, from 54.0 to 53.9. However, traders will be disappointed if the Retail Sales slips below the previous 2.7% increase even before the virus wave 2.0 attacked economic activities. Alternatively, an upbeat print may add strength to the pair’s latest run-up but a major rise will have to wait until figures for August rollout.

Technically, an ascending trend line from August 03, currently near 0.7135, restricts the pair’s immediate downside ahead of the monthly bottom surrounding 0.7075. On the upside, sustained trading beyond 0.7200 will attack 0.7245 and the year 2019 top surrounding 0.7300. Overall, the view remains bullish unless the quote slips below 0.7065/60 area including June monthly high and July 24 low.

Key Notes

AUD/USD consolidates recent gains around 0.7200 amid mixed sentiment

AUD/USD Forecast: Ending the day unchanged just below 0.7200

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.