AUD/USD plummets to 1-week low as Australia’s Retail Sales misses the mark

AUD/USD slumps after Australian Retail Sales lagged behind the forecast and prior.
Market sentiment doldrums amid US-China trade tussle and Hong Kong protests.
RBA, the return of the US traders will be in the spotlight.

With the disappointing Retail Sales data from Australia offering additional pleasure to the Aussie sellers, AUD/USD drops to a fresh one-week low of 0.6695, before recovering to 0.6712, during early Tuesday.

While second quarter (Q2) Current Account Balance grew past-1.4B forecast and -2.9B prior to 5.9B, investors give more importance to the seasonally adjusted Retail Sales figures for July that dropped below 0.2% expectations to -0.1%.

Earlier during the day, traders preferred the US Dollar (USD) over other major currencies amid the continued uncertainty surrounding the trade negotiations between the US and China. Another reason for the same is the US Federal Reserve officials’ latest public appearances that kept avoiding US President Donald Trump’s pressure to cut the interest rates.

Having witnessed the initial reaction to Australia’s second-tier data, investors will now keep an eye of the RBA’s monetary policy decision for fresh clues. Even if the Aussie central bank isn’t expected to roll out any changes into its current monetary policy, investors will seek details of another rate cut for fresh impulse while major forecasters, including TD Securities, are weighing two rate cuts left to be announced during the rest of 2019.

Following that, the return of the US traders after an extended weekend will also be closely observed as their reaction to the activation of tariffs on Chinese goods and no confirmation of the US-China meeting will be the key to watch.

Technical Analysis

A sustained break below nearly four-week-old support-line, at 0.6695, becomes necessary for sellers to target August month low of 0.6677 failure to do so highlights overbought conditions of 14-day relative strength index (RSI) to trigger pair’s pullback towards a week-old falling trend-line at 0.6725, followed by 21-day exponential moving average (EMA) level of 0.6771.

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