AUD/USD registers gains on Aussie strong retail sales number

The bid tone around AUD strengthened, pushing the AUD/USD to a high of 0.7451 after the Australia April retail sales data rushed past expectations.

The consumer spending as represented by the retail sales rebounded 1% in April, which is way above the consensus estimate of 0.3%. The strong retail sales number overshadowed the first quarter private capex growth, which missed estimate (actual 0.3%, expected 0.8%).

The 10-year Aussie government bond yield rose 2 basis points (bps) to 2.41% following the retail sales release. The Aussie could gain more ground if the China Caixin manufacturing PMI beats estimates.

AUD/USD Technicals

The pair was last seen trading around. A break above would 0.7459 (10-DMA) would open up upside towards 0.75 (zero figure) and 0.7516 (May 25 high). On the downside, breach of support at 0.7428 (previous day’s low) could yield a sell-off to 0.74 (zero levels) and 0.7368 (May 5 low).

The daily chart confirmed ‘death cross’ - bearish 50-DMA and 200-DMA crossover -  in mid-May, which has been followed by lower top formation. The daily RSI is below 50.00, while a weak close today would confirm a bearish crossover on the MACD.