Article By: Anil Panchal

Early Wednesday, the market sees the preliminary reading for the June month Retail Sales data from Australia at 01:30 GMT. Following a 16.9% increase in May, markets are expecting a 7.1% rise in the key data. Traders are particularly interested in the data as the RBA Governor Philip Lowe showed readiness to cut the rated, if needed, on Tuesday.

Analysts at Westpac don’t turn down the market forecasts while saying:

The series has produced record swings in recent months due to the pandemic, +8.5%, -17.7% then +16.9% in May. Westpac looks for a consolidation, +0.5%. Sales were up 5.8% in May versus May 2019, a reminder that this survey is overweight food retailing, underweight services consumption.

Elsewhere, TD Securities seem following the trend as it says:

Preliminary Retail Sales for June should provide a fairly good picture of the final outcome. Retail sales in May bounced by a record but after two successive months of falling house prices, a renewed pick up in COVID cases in Vic and consumers factoring in some scaling back of government support measures over the coming months, retail sales gains are likely to be modest.

How could it affect AUD/USD?
While the recent risk-on sentiment and the upbeat RBA minutes have already played their roles to propel the AUD/USD pair beyond 0.7100. Bulls are seeking a space to catch a breather and downbeat readings of the scheduled data may provide the same. Also increasing the risk of the pair’s pullback to 0.7000 psychological magnet is the surge in the coronavirus (COVID-19) figures in Victoria and RBA Governor Lowe’s readiness to cut the rates in case of a need. On the other hand, upbeat data will escalate the pair’s run-up towards 0.7200 round-figures.

Technically, a sustained clearance of 0.7100 enables the AUD/USD bulls to challenge highs marked in April 2019 and late-February 2019, around 0.7200. However, overbought RSI suggests a mild pullback that can become worries if it drags the quote below July 2019 peak surrounding 0.7085-80.

Key Notes
AUD/USD consolidates near 15-month high above 0.7100, eyes Aussie Retail Sales

AUD/USD Forecast: Bullish breakout points to a test of 0.7200

About Australian Retail Sales
The Retail Sales released by the Australian Bureau of Statistics is a survey of goods sold by retailers is based on a sampling of retail stores of different types and sizes and it's considered as an indicator of the pace of the Australian economy. It shows the performance of the retail sector over the short and mid-term. Positive economic growth anticipates bullish trends for the AUD, while a low reading is seen as negative or bearish.