The AUD/USD was almost at a standstill earlier on Friday. The pair inched slightly higher and was trading at $0.7244 after the release of Australia’s retail sales data.
The retail trade figures released by the Australian Bureau of Statistics (ABS) show that the Australian retail turnover declined 2.7% in July 2021. The decline in July’s retail trade was the largest monthly fall this year, after a 1.8% fall in June 2021.
According to Ben James, Director of Quarterly Economy Wide Surveys, the lockdown restrictions in most Australian states heavily weighed on retail trade. The reimposing of strict virus restrictions saw many non-essential retail businesses closing their physical stores. The first full-month lockdown in New South Wales saw the state’s retail turnover slip 8.9%, the largest fall since August 2020.
The largest fall by industry was recorded in clothing, footwear, and personal accessory retailing, which inched 15.4% lower. The retail volume sales in restaurants, cafes, and takeaway food services fell 12.3%. On the flip side, food retailing recorded the largest increase as the restrictions kept people at home, hence limiting their mobility.
Investors are now eyeing Jerome Powell’s speech later today after the end of the Fed’s two-day annual Jackson Hole symposium. They are hoping to get clues on when the Federal Reserve plans to start the scaling down of monthly asset purchases.
AUD/USD Technical Analysis
For the past week, the AUD/USD pair has been on a downward trend. In its previous trading session, the currency pair closed in lower after a decline in the US real GDP data for the second quarter.
On the 4-hour chart, the pair is trading along with the 25 and 50-day exponential moving averages. The pair is also trading below the 200-day moving average, which is a bearish indicator.
Therefore, the AUD/USD pair is likely to extend its bearish outlook before bouncing back. A move past the 200 DMA will have the bulls eyeing the resistance at $0.7500. However, a move below the support level at $0.7100 will invalidate this view.