Retail Sales Overview
Early Thursday, the market sees preliminary readings of Australia's seasonally adjusted Retail Sales for June month at 01:30 GMT. Market consensus suggests a downbeat MoM print of 0.5% versus 0.9% prior readings, suggesting the lack of sustained improvement in economic activity after posting the softer outcome in May.
Given the recently mixed Aussie data and downbeat economic forecasts from Aussie Treasurer Jim Chalmers challenging the Reserve Bank of Australia’s (RBA) hawkish bias, today’s Aussie Retail Sales appear the key for the AUD/USD traders.
It’s worth noting that the Australian Bureau of Statistics (ABS) is also up for releasing the second-quarter (Q2) Export Price Index and Import Price Index at the aforementioned time, which in turn increases the importance of Thursday’s economic calendar for the pair traders.
Ahead of the data, Westpac said,
Australian credit and debit card data suggest retail sales should post a solid gain in June, concealing the backdrop of weakening confidence (Westpac f/c 0.6%). A strong lift in export prices is anticipated in Q2 given the strength of commodity prices (Westpac f/c: 8.0%), while a higher AUD likely tempered the lift in import prices from global energy inflation (Westpac f/c: 2.0%).
How could it affect AUD/USD?
AUD/USD dribbles around the six-week high near 0.7000, struggling to extend the post-Fed rally, as traders await Australia’s Q2 Import Price Index and Retail Sales for June during Thursday’s Asian session. In doing so, the Aussie pair traders also justify the market’s cautious mood amid fears of US recession, as well as recently released downbeat economic forecast updates from Australia.
That said, Australia’s seasonally adjusted Retail Sales for June is expected to ease to 0.5% versus 0.9% prior, which in turn supports Australian Treasury’s downbeat economic predictions and can probe the RBA hawks. The same could also trigger the AUD/USD pair’s pullback if Australia’s Q2 readings of the Export Price Index and Import Price Index came in softer than market forecasts of 19.7% and 1.9% in that order.
It’s worth noting that the softer-than-expected Aussie Q2 Consumer Price Index (CPI) has already teased AUD/USD sellers but failed due to the Fed-led rally. Hence, today’s Aussie data may clarify the near-term pair moves ahead of the US Q2 Gross Domestic Product (GDP) Annualized.
Technically, a successful upside break of the previous resistance line from April and the 50-DMA, as well as the bullish MACD signals, hint at the AUD/USD pair’s further upside. That said, the 38.2% Fibonacci retracement of the April-July downside, also nearing the mid-June swing high around 0.7070, appears to be the immediate resistance for the pair. Alternatively, pullback moves may initially aim for the 50-DMA level of 0.6972 before testing the previous resistance line near 0.6930.
Key Notes
AUD/USD Price Analysis: Stays on the way to 0.7070 hurdle
AUD/USD steadies near six-week top around 0.7000 ahead of Aussie Retail Sales, US GDP
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.
