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  • An above-forecast Aussie retail sales reading is not helping the Aussie dollar.  
  • US-China trade war fears, yuan slide, and a broad-based USD rally are likely capping the upside in the AUD.  

A better-than-expected Australia retail sales release seems has failed to put a strong bid under the Aussie dollar.

The currency pair jumped 15 pips to a high of 0.7375 a few minutes ago as the June’s seasonally-adjusted retail sales reading for Australia came in at 0.4 percent, beating the estimated drop to 0.3 percent from the previous month’s print of 0.4 percent.

However, the gains were quickly erased as a better-than-expected retail sales reading, though a good news, is not enough to counter the negative impact of escalating US-China trade tensions and the resulting sell-off in the Chinese yuan.

Looking forward, the trade tensions will likely keep the AUD under pressure. Further, the EUR/USD has witnessed a downside break of the 1.5-month long pennant pattern and risks deeper sell-off. That would only fuel to the broad-based dollar rally.

As of writing, the AUD/USD is trading largely unchanged on the day at 0.7360, having dropped 0.6 percent on Thursday.

AUD/USD Technical Levels

Support: 0.7355 (previous day’s low), 0.7318 (July 20 low), 0.73 (psychological level)

Resistance: 0.7391 (5-day moving average), 0.7449 (50-day moving average), 0.7484 (July 10 high)