- April 21, 2021
- Posted by: Trading
- Category: News
Australian Retail Sales Talking Points:
- Australian retail sales grew by 1.4% in the month of March, against an expected reading of 1%
- Australian Dollar aimed higher in immediate trade, but faded
- AUD/USD may look to retest 0.7800, negating the recent formation of a head & shoulders pattern
Australian retail sales grew by 1.4% during the month of March, well-surpassing the consensus of 1% growth. In immediate trade, the Australian Dollar looked higher. The strong growth in retail sales was fueled by lockdown restrictions being eased nationwide, along with shopping for an earlier than usual Easter holiday. With the Reserve Bank of Australia set to remain highly accommodative for the near term, the Australian economy looks set to continue its robust recovery from the COVID-induced recession.
Australian Retail Sales Preliminary Data
As mentioned, The Reserve Bank of Australia remains in no rush to tighten monetary policy. Minutes for the RBA’s most recent meeting were released on Tuesday, with some members of the Monetary Policy Committee (MPC) indicating their desire to remain accommodative until inflation and employment targets are met. Previous comments from Philip Lowe, Governor of the RBA, have revealed that the current policy framework may remain in-place until 2024 in order for the RBA to achieve its mandate.
Recommended by Brendan Fagan
How to Trade AUD/USD
The potential for a pop in AUD/USD remains, as lower US Treasury yields may provide the springboard needed for the pair to test recent resistance around 0.7800. An accommodative Federal Reserve coupled with the recent retreat in US equity markets may lead to sustained inflows in US bonds, sending yields lower. While yields have shot up in recent weeks, it appears the “oversold” conditions in US bonds have dissipated, which may allow for some USD weakness. While the longer-term trend for US yields remains higher, the recent pullback may allow AUD/USD to explore higher levels.
AUD/USD Daily Chart
Chart created with TradingView
— Written by Brendan Fagan, Intern for DailyFX
To contact Brendan, use the comments section below or @BrendanFaganFX on Twitter