AUD/USD sticks to post-RBA gains, above mid-0.7200s

   “¢   Disappointing retail sales/import data exert some initial pressure.
   “¢   Not so dovish RBA prompts some aggressive short-covering move.
   “¢   A follow-through USD uptick now seemed to cap additional gains.

The AUD/USD pair built on its goodish intraday bounce from sub-0.7200 level and climbed to fresh session tops in the last hour.  

The pair extended last week’s rejection slide from the very important 200-day SMA and lost some additional ground during the Asian session on Tuesday following the release of dismal Aussie macro releases – a larger than expected fall in monthly retail sales and weaker import data.

In fact, the seasonally adjusted domestic retail sales fell 0.4% in December as against consensus estimates pointing to a 0.1% drop. Meanwhile, Aussie trade surplus widened to A$ 3,681 million but the uptick was largely driven by a 6% drop in imports and did little to lend any support.

The pair, however, quickly reversed losses after the RBA, in its first monetary policy update of the year, sounded less dovish than expected and maintained a fairly optimistic view on the economy, though noted in the statement that downside risks have increased.  

Meanwhile, the Australian central bank flagged a downgrade to its growth forecast for this year amid falling house prices in Australia and uncertainty over household spending, albeit did little to prompt any fresh selling around the domestic currency.

The pair rallied over 70-pips and jumped back above mid-0.7200s in reaction the announcement, albeit a follow-through US Dollar uptick kept a lid on any further up-move, at least for the time being.

Moving ahead, today’s US economic docket, highlighting the release of ISM non-manufacturing PMI, will now be looked upon for some short-term trading opportunities later during the early North-American session.

Technical levels to watch