AUD/USD lunges for 0.77 on Aussie Retail Sales, China Service PMI

• The Aussie Retail Sales beat expectations to print 0.6 percent while the Chinese Service PMI missed, coming in at 52.3.
• The AUD will see Trade Balance figures tomorrow at 00:30 GMT.

The AUD/USD pushed into 0.7700 on reaction following the Australian Retail Sales figures that beat expectations and gave the Aussie a boost in the Asian market session, but bulls hesitated after China's Services PMI missed expectations.

Australian Retail Sales activity in February cleanly beat expectations, and the indicator printed at a 0.6 percent increase in retail sales, a clean beat of the expected 0.3 percent, clearing the previous figure of 0.2 percent in January. This month's activity increase combines with January's to erase the five percent decline experienced in December 2017 and the Aussie lifted higher on reaction.

China's Services PMI meanwhile came in below expectation, printing at a 52.3 contraction versus the forecast 54.5 expansion compared to the previous figure of 54.2. The Aussie hesitated on reaction but is still grinding higher into the 0.7700 handle.

Despite the positive showing of Aussie retail sales, the AUD is still in an excessively precarious position and is struggling to regain the 0.7700 major handle as the widening interest rate differential between the AUD and the USD punishes the Australian currency. The last time the Aussie slipped beneath the 0.7700 level was in October of 2017, and the AUD/USD proceeded to slip to the 0.7500 handle into December 2017.

AUD/USD Levels to watch

The AUD is lifting on positive reactions to macro figures, but bearish remains tight in this region, and as FXStreet's own Ross Burland noted, "while MACDs and Slow Stochastics suggest a low may be close, daily closes below 76.4 Fibo at 0.7651 (recent low) and a break below 0.7643 could set off a test of the 0.75 handle. On a break higher and through the rising weekly support line and a 200-D SMA just above 0.78 the figure,  0.7910 is open."