AUD/USD: Trading the Australian Retail Sales October 2011


Australian Retail Sales is the most important indicator of consumer spending. Its release in the first week of the month provides analysts and investors with their first look at figures from the vital consumer sector.

Here are all the details, and 5 possible outcomes for AUD/USD.

Published on Wednesday at 00:30 GMT.

 Indicator Background

Consumer spending is one of the most important components of the economy, and strong numbers in this sector signify that the economy is expanding. Actual figures which are higher than those forecast may push the Aussie upwards.

September’s reading of 0.5% not only was higher than that forecast, but also showed an impressive jump from the August reading of -0.1%. The forecast for October is a leveling off to 0.3%, but nonetheless indicative of expansion.

Sentiments and levels

Economic indicators, such as housing, remain weak, and commodity prices, especially copper, have fallen and hurt the vital export sector. Thus, the overall sentiment is bullish on AUD/USD towards this release.

Technical levels, from top to bottom:   1.0120, 99.30, 98, 97, 96.22 ,95.40 and 94.60.

5 Scenarios

  1. Within expectations: 0% to 0.6%: In such a case, the Aussie is likely to rise within range, with a small chance of breaking higher.
  2. Above expectations: 0.7% to 1.1%: An unexpected higher reading can send AUD/USD well above one resistance line.
  3. Well above expectations: Above 1.1%: Such an outcome would propel the pair upwards, and a second resistance line might be broken as a result.
  4. Below expectations: -0.5% to -0.1%: A negative reading would rattle markets and could push the pair below one level of support.
  5. Well below expectations: Below -0.6%: Given the recent retail sales readings, such an event is unlikely. In this scenario, the Aussie will fall and could break a second support level.

For more about the Aussie, see the AUD to USD forecast.

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About Author

Kenny Fisher - Senior Writer A native of Toronto, Canada, Kenneth worked for seven years in the marketing and trading departments at Bendix, a foreign exchange company in Toronto. Kenneth is also a lawyer, and has extensive experience as an editor and writer.

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