AUD/USD cheers big beat on Aussie retail sales, RBA day ahead

AUD/USD jumped to a session high of 0.7679 after the consumer spending in Australia as represented by the retail sales number beat estimates by a wide margin. 

Australia Retail sales jumped 0.6% m/m in May, beating the estimated rise of 0.2%. The prior month’s figure was 1%. 

RBA eyed

The central bank is widely expected to keep rates unchanged. Traders would watch out for a change in the narrative on the interest rates. While most economists expect the RBA to retain its neutral stance, some investors have positioned for a potential hawkish twist. 

Australia inflation remains below its 10-year average, while the strength in the AUD is already complicating the rebalancing process. These are just enough reasons for the RBA to avoid going the ECB-way. 

AUD/USD Technical Levels

The spot was last seen trading around 0.7665. A break above 0.7676 (161.8% Fib extension of May 9 low - May 23 high - June low) would expose 0.7712 (June 30 high). Only a daily close above the same would signal the continuation of the rally from the May low of 0.7328 and could yield 0.78 (zero levels). On the downside, breach of support at 0.7644 (previous day’s low) could yield a pullback to 0.7615 (10-DMA) and 0.7610 (Apr 17 high).