AUD/USD pierces 0.7100 on upbeat Australia Retail Sales, Fed in focus
|- AUD/USD renews intraday high as Aussie Retail Sales crossed forecasts.
- Australia’s Retail Sales rose 1.6% MoM in March.
- Sluggish sentiment ahead of the key FOMC, off in Japan, China also restricts the pair’s moves.
- US data, risk catalysts will also be important for trading directions.
AUD/USD grinds higher as it renews intraday top around 0.7110 on firmer Aussie Retail Sales data for March. In doing so, the Aussie pair extends the previous day’s recovery from a three-month low amid pre-Fed anxiety.
Australia’s Retail Sales for March rose past 0.6% market consensus to 1.6%, versus 1.8% prior. Earlier in the day, Australia’s S&P Global Services and Composite PMIs eased below the previous readouts of 56.2 and 56.6 to 55.9 and 56.1 in that order.
Despite the recently softer data, the Reserve Bank of Australia’s (RBA) hawkish play, as well as hopes of no major positive surprise from the Fed, underpin the AUD/USD rebound of late. Adding to the corrective pullback are the mild gains of equities in the US.
It should be observed that holidays in China and Japan also restrict bond moves in Asia and allow the Aussie pair to portray recovery moves.
That being said, the AUD/USD prices rallied the previous day the most in a fortnight after the RBA superseded market expectations of a 0.15% rate hike with 25 basis points (bps) of a lift to the benchmark rate. Not only that, the Australian central bank’s readiness for more such moves, considering inflation fears and economic resilience, also favored the pair on Tuesday.
The AUD/USD recovery, however, was against the strong prints of the US JOLTS Job Openings and Factory Orders for March. The reason for the pair’s latest recovery could also be linked to the hopes that the Fed won’t go beyond the already priced-in measures.
Even so, the Fed is known for surprises and the hot inflation requires attention, which in turn makes today’s Federal Open Market Committee (FOMC) the key event. Also important will be April’s outcome of the US ISM Services PMI and ADP Employment Change, as well as geopolitical and covid-linked headlines.
Technical analysis
March’s low of 0.7165 appears as a short-term ceiling for the AUD/USD prices even as the RSI rebound challenges bears targeting the yearly low surrounding 0.6965.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.