Aussie Retail Sales Preview - What to Expect in AUD/USD?
AUD/USD
is headed for a second weekly bearish close with yet further
intra-session selling with the greenback advancing across the board. We
have a number of key releases left, and for today, retails sales in
Australia will be taking the headlines.
AUD/USD topped out at
0.7833 in the middle of April and has been in decline since scoring a
fresh intraday low overnight of 0.7446 on reasonable services data in
the U.S. session with a bounce in factory orders offsetting the weak ADP
employment report that enabled the greenback to continue advancing
across the board.
The downside in the Aussie had already been
exposed on the weak CPI Q1 data in Australia and the RBA clinched the
trade for the bears by cutting interest rates by 25bps and curbing the
Aussie's strength. While we now await the nonfarm payrolls for the end
of this week as the next big market catalyst, for today, retails sales
and trade balance are due from Australia that are usually market movers
in Asia.
Extra reading: Nonfarm Payrolls - "Fuhgeddabouit"!
Retails sales:
Analysts
at Westpac offered their preview:"Australia Mar retail sales are due at
11:30am Syd/9:30am Sing/HK. Westpac and the median forecast are both at
0.3% m/m after a flat print in Feb. Consumer sentiment softened a
little in Mar and further in Apr. The early timing of Easter may give
some boost though the ABS attempts to adjust for this and an unusually
warm autumn may be a negative for some segments. Q1 CPI suggests that
much of the weakness seen early this year is due to falling prices, the
detail suggesting a decline in retail prices over the quarter of 0.2%
compared to a 0.7% rise in Q4. This brings Westpac's forecast for Q1
real retail sales to 0.8%q/q; consensus is 0.7%."
AUD/USD levels to monitor
AUD/USD
had been eroding the 2016 up-trend line at 0.7550 and took that out
earlier in the week to then break a further key support at 0.7477 being
the late March low. 0.7446 is a fresh low made overnight and on a bad
number, a break of 16th March lows at 0.7414 would give way to 0.7380
and 11th Oct highs with the possibility of bears making a break for the
100 dma at 0.7330.
On good data, we are looking at a limited
correction towards the 55 dma at 0.7524 but should the wind pick up, the
next levels above there are the 50 dma at 0.7557, a full recovery back
to the 0.76 handle where the 20 dma resides at 0.7651.
