AUD/USD Outlook Hinges on Australia Retail Sales, Turnbull Budget

Australia Retail Sales to Increase 0.3% Following 0.6% Expansion in 4Q 2016.

Household Spending to Rebound 0.3% After Unexpectedly Contracting 0.1% in February.

Trading a News: Australia Retail Sales

Australia Retail Sales

AUD/USD stands during risk of fluctuating a decrease from progressing this month should Australia’s Retail Sales news expel a enervated opinion for enlargement and inflation. Nevertheless, Prime Minister Malcom Turnbull’s 2017-18 bill might lean a aussie-dollar sell rate as a bloc supervision skeleton to boost open spending and pledges quell corporate taxes, and a pull to inspire a stronger economy might worsen a interest of a Australian dollar as it raises a Reserve Bank of Australia’s (RBA) range to pierce divided from it’s easing cycle.

Why Is This Event Important:

Even yet a RBA appears to be in no rush to normalize financial policy, a element change in a mercantile opinion might pull Governor Philip Lowe Co. to change their balance generally as officials disagree ‘the recently announced supervisory measures should assistance residence a risks compared with high and rising levels of indebtedness.’ With that said, a RBA might uncover a larger eagerness to lift a central money rate off of a record-low as ‘the economy is stability a transition following a finish of a mining investment boom, with a drag from a decrease in mining investment entrance to an finish and exports of resources picking up.

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Impact that Australia Retail Sales has had on AUD/USD during a prior quarter

4Q Australia Retail Sales

AUD/USD 15-Minute

AUD/USD Chart

Australia Retail Sales increasing 0.9% after holding prosaic during a three-months by September, while domicile spending suddenly slipped 0.1% in Dec amid forecasts for a 0.3% rise. A deeper demeanour during a news showed sales of domicile products slumped 2.3% in a final month of 2016, while direct for attire increasing 1.4%, with dialect store sales also climbing 0.3%. The Australian dollar struggled to reason a belligerent following a churned collection of data, with AUD/USD pulling behind from 0.7676 to finish a day during 0.7659.

How To Trade This Event Risk(Video)

Bearish AUD Trade: Australia Retail Sales Continues to Disappoint

  • Need a red, five-minute candle following a sales news to cruise a brief AUD/USD position.
  • If marketplace greeting favors a bearish aussie trade, sell AUD/USD with dual apart lots.
  • Set stop during a near-by pitch high/reasonable stretch from entry; demeanour for during slightest 1:1 risk-to-reward.
  • Move stop to breakeven on remaining position once initial aim is met, set reasonable limit.

Bullish AUD Trade: Private-Sector Consumption Exceeds Market Expectations

  • Need a green, five-minute candle to preference a prolonged aussie trade.
  • Carry out a same setup as a bearish AUD trade, only in reverse.

Potential Price Targets For The Release

AUD/USD Daily

AUD/USD Daily Chart

Chart – Created Using Trading View

  • AUD/USD continues to lane a 2016-range following a unsuccessful run a a Nov high (0.7778), and a span stays during risk of giving behind a allege from a start of 2017 as cost a Relative Strength Index (RSI) mostly safety a bearish formations from March; however, a miss of movement to break/close next a Fibonacci overlie around 0.7390 (38.2% retracement) to 0.7420 (61.8% retracement) might encourage a near-term miscarry generally as a span comes adult opposite channel support, with a initial topside jump entrance in around 0.7459 (38.2% retracement) followed by 0.7500 (50% retracement) to 0.7530 (38.2% expansion).
  • Interim Resistance: 0.7730 (61.8% retracement) to 0.7770 (61.8% expansion)
  • Interim Support: 0.7150 (161.8% expansion) to 0.7180 (61.8% retracement)

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IG Sentiment

Retail merchant information shows 60.7% of traders are net-long AUD/USD with a ratio of traders prolonged to brief during 1.55 to 1. The commission of traders net-long is now a top given December 13 when AUD/USD traded nearby 0.74932. The series of traders net-long is 15.1% aloft than yesterday and 45.2% aloft from final week, while a series of traders net-short is 5.9% aloft than yesterday and 23.6% reduce from final week.

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— Written by David Song, Currency Analyst

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