- AUD/USD renewed intraday high as Australian retail sales exceeded forecasts.
- Australia’s retail sales grew 1.6% MoM in March.
- Sluggish sentiment ahead of the major FOMC, closed in Japan, China also restricts the pair’s move.
- US data, risk catalysts will also be important for trading directions.
AUD/USD grinds higher on strong Australian retail sales data for March with renewing intraday tops around 0.7110. In doing so, the Australian pair extends the previous day’s recovery from a three-month low amid pre-Fed concerns.
Australia’s retail sales for March rose 0.6% to 1.6% from the market consensus, up from 1.8% earlier. Earlier in the day, Australia’s S&P Global Services and Composite PMI eased to 55.9 and 56.1, from previous readouts of 56.2 and 56.6.
Despite soft data recently, upbeat Reserve Bank of Australia (RBA), as well as hopes of no major positive surprises from the Fed, dampened the AUD/USD rebound of late. Adding to the corrective pullback is the mild gains of equities in the US.
It remains to be seen that holidays in China and Japan also restrict bond moves in Asia and allow the Australian pair to portray recovery moves.
That being said, AUD/USD prices rose the most in a fortnight on the previous day, with the RBA increasing the benchmark rate by 25 basis points (bps) to beat market expectations of a 0.15% rate hike . Not only that, the Australian central bank’s readiness for more such moves given inflationary fears and economic resilience also favored the pair on Tuesday.
However, the AUD/USD recovery was against a strong print of US JOLTS job openings and factory orders for March. The reason for the latest recovery of the pair can also be added to the expectation that the Fed will not go beyond pricing measures already in place.
Still, the Fed has been known to surprise and require attention to hot inflation, which in turn makes today’s Federal Open Market Committee (FOMC) the key event. US ISM Services PMI and ADP employment changes, as well as geopolitical and COVID headlines, will also have an important April result.
The March low of 0.7165 appears as a short-term range for AUD/USD price, while the RSI rally targets an annual low near 0.6965.