Australia retail sales sparkles

The Australian dollar has posted losses for a second straight day. AUD/USD is currently trading at 0.7567, down 0.24% on the day.

Australia retail sales jump

The week started on the right foot in Australia, as retail sales climbed an impressive 7.0% in November. This crushed the consensus estimate of 2.1% and marked the highest gain since June. The sharp gain was a result of the easing of the lockdown in Victoria, which allowed for a full month of trade. As well, sales from Black Friday also boosted retail sales. The reading reiterates the significant effect that Covid health restrictions are having on economic activity.

The Australian dollar has failed to make any gains on Tuesday, despite the positive retail sales release. Still, the Aussie has been red-hot, recording seven consecutive winning weeks and climbing 8.4% during that time. The Australian dollar has received a boost from rising iron ore prices, which are up more than 50% this year. Iron ore is a key component in steel, and a surge in construction in China has fueled demand and led to higher prices.

 

Congress reaches stimulus agreement

After months of wrangling between congressional Republicans and Democrats, a massive stimulus package was finally approved on Monday. The USD900 billion package will provide aid to businesses and the unemployed, and is seen as a key tool in boosting the US economy, which has been hit hard by the Covid-19 pandemic. The announcement of the stimulus package on the US dollar has been muted, as the markets priced in a deal being reached. The US dollar has been in broad retreat, and with Joe Biden tweeting on Monday that more stimulus is required in 2021, it’s likely that the US dollar will remain under pressure in the coming weeks.

 

AUD/USD Technical

  • AUD/USD faces resistance at 0.7663. Above, there is resistance at 0.7805
  • There is support at 0.7539, followed by support at 0.7457
  • The pair is putting strong downward pressure on the 10-day MA

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.