Retail Sales overview
Early Friday, the market sees February month Retail Sales data from Australia at 00:30 GMT. Following weak prints in December and January, markets are expecting an increase of 0.4% in the key data versus -0.3% prior. It should also be noted that the Australian Bureau of Statistics (ABS) has already released the preliminary figures based on 80% data, which strengthened the case for a 0.4% increase, during the last week.
Although traders are more interested in coronavirus (COVID-19) updates off-late, any disappointment from the data might not refrain from exerting additional downside pressure on the Aussie pair.
Analysts at Westpac don’t turn down the market forecasts while saying:
The final update for Australia February retail trade is also due (11:30 am Syd/8:30 am Sing/HK), following the preliminary read of 0.4% (one of the surveys the ABS has started producing in two stages, due to the pandemic). Westpac expects a softer print of 0.2% in the final measure (from 0.4%), under the assumption that the preliminary survey was heavily skewed towards larger businesses such as supermarkets.
Elsewhere, TD Securities seem following the trend as it says:
Feb Retail Sales are expected to rise 0.3% m/m following weak prints for Dec and Jan (as Black Friday brought forward demand and bushfires weighed on activity). The ABS published preliminary data for Feb last week based on 80% of data received showing sales increased 0.4% m/m but we expect a slight softening into the tail end of the month on growing virus headlines.
How could it affect AUD/USD?
AUD/USD keeps bearing the burden of the US dollar strength amid the virus-led pessimism. While the recovery in figures is less likely to please the buyers and disappointment from the outcome could provide additional proofs of economic damages and hurt the Aussie pair as well.
Technically, the pair’s break below 21-day SMA and sustained trading under the two-week-old rising trend line also favors the bears. However, 10-day SMA near 0.6020 and 0.6000 round-figure seem to provide a breathing space for the bears ahead of flashing fresh lows of the month. Alternatively, a 21-day SMA level of 0.6150, followed by the support-turned-resistance, currently at 0.6230, could keep the pair’s pullback moves in check.
Key Notes
AUD/USD stays on the slippery ground below 0.6100, ignores risk reset
AUD/USD Forecast: Slowly grinding lower
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.
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