When is the Australian Retail Sales and how could they affect AUD/USD?

Retail Sales overview

Early Friday, the market sees the preliminary reading for the January month Retail Sales data from Australia at 00:30 GMT. Following the disappointment in December, Aussie retail activity has been promising and the same can help Retail Sales figures to recover from -4.1% to +2.0%.

Ahead of the release, Westpac said,

Australia retail sales for January (11:30 am Sydney time/8:30 am Singapore) are estimated to have risen 2.0% m/m, following a 4.1% fall in December. While this series has been volatile of late, our Westpac Card Tracker shows underlying positive momentum carried into January and suggests sales nationally will report a small rise.

Analysts at TD Securities also sound upbeat on the data while saying,

We expect Jan's retail sales to remain firm despite the 4.3% m/m decline in Dec'20 on the back of healthy consumer sentiment and households continuing to wind down their accumulated savings. On an annual basis, Dec's retail sales still recorded a positive 9.6% y/y rise, driven by the strong 13.4% y/y increase in the discretionary retail category.

How could it affect AUD/USD?

AUD/USD picks up bids around 0.7770 while extending the previous day’s recovery moves to early Friday’s Asian session. In doing so, the quote ignores downbeat activity numbers flashed by the Commonwealth Bank for February while cheering the US dollar’s latest weakness. Given the expected recovery in the Aussie Retail Sales, the AUD/USD prices will benefit from the positive data, if any. On the contrary, negative figures may have to be backed by the US dollar recovery to recall the sellers.

Technically, the pair’s ability to stay above 10-day SMA on a daily closing keeps it directed towards breaking the double tops around 0.7805, which in turn will eye to refresh the monthly top beyond the present level around 0.7820. Meanwhile, a downside break of 0.7750, comprising 10-day SMA, needs to drop below an ascending trend line from November 2020, at 0.7669 now, to recall the bears.

Key Notes

AUD/USD continues to consolidate in mid-0.7700s with focus on Aussie data

AUD/USD Forecast: Range trading continues sub-0.7800

About Australian Retail Sales

The Retail Sales released by the Australian Bureau of Statistics is a survey of goods sold by retailers is based on a sampling of retail stores of different types and sizes and it's considered as an indicator of the pace of the Australian economy. It shows the performance of the retail sector over the short and mid-term. Positive economic growth anticipates bullish trends for the AUD, while a low reading is seen as negative or bearish.