Retail Sales is considered one of the most important indicators of consumer spending. In turn, consumer spending and confidence are critical components for economic growth. A reading that is higher than the market forecast is bearish for the US dollar.
Here are all the details, and 5 possible outcomes for AUD/USD.
Published on Wednesday at 1:30 GMT.
Indicator Background
As a key consumer indicator, Retail Sales can have a significant effect on the Australian dollar. An unexpected reading could affect the movement of AUD/USD.
The previous reading of 0.9% sparkled, easily exceeding the prediction of 0.3%. Also the indicator posted its best performance since March 2010. The market forecast calls for a modest increase of 0.2% for this reading.
Sentiments and levels
The Australian dollar continues to tumble, and has now dropped almost 6 six cents in the month of May. What’s next for the pair? US economic data continues to outshine the Australian releases. Given the turbulence and uncertainty in Europe, investors will be favoring safe haven currencies, which spells more trouble for the aussie.So, the overall sentiment is bearish on AUD/USD towards this release.
Technical levels, from top to bottom: 1.0080, 1.00, 0.9917, 0.9860 ,0.9780 and 0.9668.
5 Scenarios
- Within expectations: -0.1% to 0.5%: In such a case, the Aussie is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 0.6% to 0.9%: An unexpected higher reading can send AUD/USD above one resistance line.
- Well above expectations: Above 0.9%: Such an outcome would propel the pair upwards, and a second resistance line might be broken as a result.
- Below expectations: -0.5% to -0.2%: A weak reading could push AUD/USD below one level of support.
- Well below expectations: Below -0.5%: In this scenario, the pair could drop below a second support level.
For more about the Aussie, see the AUD to USD forecast.
Share
