AUD/USD advances above 0.76

The AUD/USD pair steadied after early slippage and regained traction, taking advantage of the softer tone around greenback. At the moment the pair is up 0.16% at 0.7605, a tad below its daily high at 0.7610.

Despite the strong signals and heightened expectations towards a rate hike in March, DXY remains capped by 101.65-70 area on Monday. According to CME Group FedWatch tool, the probability of a 25 bp hike on March 15 is at 86% based on Fed Funds futures prices, 

Earlier during the Asian session, data from the Australian Bureau of Statistics showed that retail sales rose 0.4% in January, in line with market forecasts and up from a 0.1% fall witnessed in December. However, record-low wages growth continue to hurt the economy by weakening the spending power. "It is still early days, but even if growth in retail sales were to remain at 0.4 per cent in February and March, it appears that real consumption growth would still struggle to match the fourth quarter's 0.9 per cent q/q rise," said Kate Hickie, an economist at Capital Economics.

Technical outlook

Technical resistances for the pair are aligned at 0.7640 (horizontal level), 0.77 (Feb. 2 high/psychological level) and finally 0.7740 (Feb. 23 high). On the downside, the first support could be found at 0.7540 (Mar. 3 low), followed by 0.7520 (Fib. %38.2 - Late Dec. - late Feb uptrend), and 0.77 (psychological level).