Global macro overview for 06/02/2017:
In the last month of 2016, the Australian retail sales posted a surprise fall. The official figures released today reported that retail sales dropped 0.1% to $A25.61 billion on a seasonally adjusted basis in December, following the preceding month's downwardly revised gain of 0.1% and missing analysts' expectations for a rise of 0.3% in the reported month. Moreover, it was the first contraction in retail sales since July 2016. The biggest decrease of 2.3% was noted in household goods retailing. The Australian Bureau of Statistics reported that the fall was mainly driven by a sharp 6.6% decrease in sales of hardware, building and garden supplies (the biggest monthly decrease in this category since July 2000). In conclusion, this set of worse than expected data reveals a worrying lack of momentum retails sales heading into 2017. The Reserve Bank of Australia will announce its interest rate decision tomorrow at 03:30 am GMT and this is the next macroeconomic event for Australia worth to keep an eye on.
Let's now take a look at AUD/USD technical picture at the daily time frame. The worse than expected data did not spark any panic selling as the bullish uptrend is still intact and there is still not divergence between the price and the momentum oscillator. The market still trades above all of the moving averages and it looks like the bulls will try to break out above the recent important high at the level of 0.7777 and then they might even challenge the swing high at the level of 0.7835. The next support is seen at the level of 0.7609.
