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  • AUD/USD has rallied  on the retail sales data, surpassing the pre-nonfarm payrolls highs of 0.7593.
  • April retail sales 0.4% m/m (vs. expected +0.3%).
  • Q1 Inventories 0.7% q/q (vs. expected 0.0%).
  • Q1 company profits 5.9% q/q (vs. expected +3.0%).

A slew of data arrived for Aussie traders today. However, the key data came in the form of retail  sales that arrived higher than expected, (0.4% m/m (vs. expected +0.3%).  However, this is a modest result and analysts at Westpac highlighted earlier that while overall business conditions surveys are upbeat, responses from retailers indicate difficult conditions. However, eas big improvement on the prior 0.0%, so the Aussie bulls can take control from here.  

The week ahead

For the week ahead, however, the RBA will be in focus, but  today’s data will not  be sufficient to push the RBA off its neutral stance.   “More relevant for  Aussie,  will be Chinese trade balance figures to be out this week and headlines related to the trade war between the country and the US,” Valeria Bednarik, chief analyst at FXStreet argued. Also,  yes will remain focused on the trade spat between the US and counterparts and ears will be kept to the ground in respect to the June 12th historic summit between Trump and Kim Jong-un.

As far as scheduled US events:

  • ISM non-manufacturing index (Tuesday)
  • JOLTS (Tuesday)
  • Productivity, Q1 final (Wednesday)
  • Trade balance (Wednesday)
  • Initial jobless claims (Thursday)

AUD/USD levels

Trading above the  10 & 21-D SMAs, AUD/USD is in  bullish territory while the long lower wick on the daily candlesticks  underpin  that outlook. 0.7605/20 is a key zone to the upside. To  the downside, 0.7515 guards 0.7470  and   the  May’s low is eyed below there.  

“If the Aussie cannot establish a foothold above $0.7620 by the end of next week, the charts may turn more decisively negative,”

analysts at Brown Brothers Harriman argued.    

Valeria Bednarik, chief analyst at FXStreet explained that technically, the daily  chart  shows that the pair managed to close above a modestly bullish 20 DMA but also that the 100 DMA crossed below the 200 DMA, both well above the current level:

“Indicators in the mentioned chart have turned marginally lower within positive levels, indicating that buying interest is still limited. Shorter term, and according to the 4 hours chart, the pair is above   a congestion of moving averages, all together in a 15 pips’ range, while technical indicators also eased in positive territory, overall offering a neutral stance.”