While stock markets have stagnated in the last few trading days, they remain quite bullish since the end of October. Treasury yields have also turned bearish, falling below 4.40% yesterday after a strong bearish reversal lower. Commodity dollars continue climbing higher, which has lasted about a month.

The softer US inflation numbers for October, are dragging on the USD while improving risk sentiment, which benefits the Australian dollar and other risk assets. The trend seems to have changed for this forex pair, as moving averages which used to act as support on the daily char,t have now turned into support.

The 100 SMA (green) was the last one to do so, while yesterday we saw a break above the 200 daily SMA (purple) as buyers pushed the price above the 0.60 level. We opened a buy AUD/USD signal yesterday after the break of the 200 SMA. Earlier today we had the retail sales report from Australia, which was expected to show a slowdown from 0.9% in September to 0.1% in October.

Australian Retail Sales Report for October

• October Retail sales MoM -0.2% vs +0.1% expected
• September Retail sales MoM were+0.9%
•  Retail sales YoY +1.2%

However, this time of year, the retail sales figures are questionable since there is little trust in the data because the relatively new Black Friday sales events in Australia skew the numbers with seasonal adjustments for the months surrounding it. The Australian Bureau of Statistics is still trying to figure out how to account for the new sales event. According to the ABS, the drop in retail sales may be attributable to buyers waiting until the end of the November sale.

AUD/USD Live Chart