AUD/USD drops after Asian market data 0.2% gains, bulls eye break of 0.7745
- AUD/USD turns soft again after Asina 0.2% gain.
- AUD/USD awaits retail sales and Chinese data this week.
Despite the 0.2% gain after positive local data overnight in the upside surprise in Aussie building approvals for Nov, jumping +11.7% with total building approvals the 3rd highest on record vs the forecasted1% decline, AUD/USD turned soft again with the recent resurgence of in the US dollar, (DXY rallied from 92.2130 to 92.6400 the high on Tuesday on the outlook for U.S. rate hikes).
AUD/USD fell from 0.7862 to 0.7813 during the European am before extending the six-day low to 0.7807 in the US shift. Currently, AUD/USD is trading at 0.7823, down -0.25% on the day. (Still, range trading persists between 0.7800-0.7900).
AUD/USD 1-3 month:
Analysts at Westpac look for AUD/USD to fall to 0.76 during the next few months, so long as markets continue to price further Fed interest rate rises in 2018, along with a neutral RBA outlook deep into 2018 and commodity prices remaining around recent levels.
Key for the Aussie this week will be retail sales for Nov released on Thursday. Overnight, the ANZ Weekly Consumer Sentiment jumped more than 4.5% to 122, the highest level since Nov 2013. This series has been trending higher since Sep 2017. Let’s see if the positive sentiment over the prior months is supportive for Aussie retail spending. also, worth keeping an eye on with be Chinese PPI, CPI on Wednesday and Friday's Chinese Trade Balance.
AUD/USD levels
"The pair retains its bearish stance, as in the 4 hours chart, it's developing below its 20 SMA, which slowly turns lower in the 0.7850 region, while technical indicators gained further downward traction within bearish territory," Valeria Bednarik, chief analyst at FXStreet explained, "A big static support comes at 0.7745, the 61.8% retracement of the October/December decline, considered now a line in the sand, as a break below it will imply a bearish continuation for the upcoming sessions," she continued.