AUD/USD dips below 0.80 on weak Aussie retail sales and smaller trade surplus

The offered tone around the Aussie dollar gathered pace, pushing the AUD/USD to a session low of 0.7991 after the Aussie retail sales missed estimates and the trade surplus came-in smaller than expected. 

Offered at the rising wedge hurdle

The currency pair faced rejection at 0.8019 [rising wedge resistance]. Domestic spending as represented by retail sales came-in 0.0% at vs. 0.3% expected. The seasonally adjusted estimate was relatively unchanged (0.0%) in July 2017. This follows a rise of 0.2% in June 2017 and a rise of 0.6% in May 2017.

Aussie trade surplus narrowed to AUD 460 million in July as opposed to the expected rise to AUD 875 million from the previous month’s print of AUD 856 million. 
The decline in the consumer spending [retail sales] is bad news for the RBA. The weak data sets are bearish for the Aussie dollar, however, caution is advised as the downside could be limited, given the Aussie 10-year government bond yield is holding on to its gains. The yield currently trades at 2.651%. 

AUD/USD Technical Outlook

FXStreet Chief Analyst Valeria Bednarik writes-

“According to the 4 hours chart, the pair has room to extend its advance, given that the intraday decline met buying interest around a bullish 20 SMA, and also the 61.8% retracement of its latest daily decline, at 0.7965, while in the same chart, technical indicators are slowly aiming to regain the upside after a period of consolidation within positive territory. Beyond the mentioned daily high, the pair has scope to extend its gains up to 0.8065, the yearly high set last July.”