AUD steady as retail sales hit expectations

The Australian dollar has recorded slight gains in the Thursday session. Currently, the pair is trading at 0.7790, up 0.23% on the day.

Australia retail sales stable

Retail sales climbed 0.5% in January, which followed the December gain of 0.6%. These are by no means earth-shattering numbers, but the two consecutive gains are welcome news after back-to-back declines of around 4 per cent. The small gains point to consumer spending stabilizing and with the recovery gaining steam, we can expect better numbers in the coming months.

It has been a busy week on the fundamental side, with a host of Australian indicators. The highlights have been the RBA policy meeting and a strong GDP report. The RBA left interest rates at the ultra-low level of 0.10%, but the rate statement was notable for its reference to the Australian dollar. The statement noted that the bank’s current monetary policy had contributed “to a lower exchange rate than otherwise. The central bank has watched with apprehension as the Australian dollar has appreciated sharply against the US dollar, with the Aussie punching above the symbolic 80-line just last week. The RBA would like a lower exchange in order to maintain price stability and protect the critical export sector.

GDP showed a strong gain of 3.1% in Q4, down slightly from 3.3% beforehand but well above the estimate of 2.5%. Finance Minister Josh Frydenberg commented that the economy was recovering more quickly than the government had anticipated, noting that the first time in recorded history that Australia has seen two consecutive quarters of economic growth of more than 3%”.

.

AUD/USD Technical

Let’s review the weekly support and resistance levels:

 

 

  • AUD/USD faces resistance at 0.7910, followed by resistance at 0.8116
  • There is weak support at 0.7752, followed closely by support at 0.7728
  • AUD/USD is trading around the 0.78 line, which is slightly above its multi-month ascending wedge support at 0.7750

For a look at all of today’s economic events, check out our economic calendar. www.marketpulse.com/economic-events/

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.
Kenny Fisher

Latest posts by Kenny Fisher (see all)