The weaker-than-expected Aussie Retail Sales data fail to elicit a bearish reaction from the Aussie dollar. AUD/USD remains flatlined near 0.7765.
As represented by Retail Sales, Australia’s consumer spending rose fell by 4.2% month-on-month in December versus expectations for a 1.5% drop following November’s 7.1% growth. The decline in consumer spending during the holiday season puts a question mark on the strength of the recovery from the coronavirus crisis and validates the Reserve Bank of Australia’s dovish stance. So far, however, the AUD sellers have remained on the sidelines.
The data has come a day after the Australian Bureau of Statistics reported that the economy added 50K jobs in December, pushing the jobless rate down to a multi-month low of 6.6%. The Aussie dollar ticked higher on Thursday on the back of upbeat labor market data and continued demand for risk assets.
The S&P 500 marked new record highs on Thursday and the NASDAQ enjoyed strong gains on the back of outperformance across the tech sector, keeping the anti-risk US dollar under pressure.
The Federal Reserve has recently squashed talks of an early QE taper. Meanwhile, markets are expecting generous fiscal spending under Joe Biden’s presidency. As such, the path of least resistance for AUD/USD appears to be on the higher side.
Analysts expect resistance on moves approaching 0.78 and 0.7820 with support intact on moves below 0.7650.
Technical levels
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