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AUD/USD Resumes Decline As Retrace Higher Seems Complete

The AUD to USD rate increased 1.50 cents earlier this month as AUD/USD retraced higher, but it seems like retrace is over and sellers are pushing the price down for this forex pair. Even last night retail sales report came on the soft side, despite turning positive after the decline in December.

AUD/USD Daily Chart – Bearish Reversing Pattern

Sellers have returned again

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AUD/USD has been on a bearish trend since the end of December, losing around 300 pips in the process, but earlier this month we saw a reversal as the USD retreated lower. However, the 200 SMA stopped the bullish momentum and after several doji xandlesticks which suggested a bearish reversal, the decline is underway already now.

Australian January Retail Sales Report

  • January Australia final retail sales +1.1% vs +1.5% expected
  • Prior was -2.7%, revised to -2.1%
  • Q4 capital expenditure +0.8% vs +0.5% expected
  • Prior was +0.6%, revised to 0.3%
  • Plant/machinery capex -0.1% vs +0.5% prior
  • Building capex +1.5% vs +0.7% prior

The final retail sales for January in Australia came in at +1.1%, falling short of the expected +1.5%. But, it is much better than the 2.1% decline in December. Additionally, the fourth-quarter capital expenditure showed a decent increase of +0.8%, exceeding the expected +0.5%. However, there was variation within the components, with plant/machinery capex declining by -0.1% while building capex rose by +1.5%.

So, despite consumers showing signs of losing steam, the construction industry seems to remain resilient, possibly driven by factors other than interest rates. Overall, these figures provide insights into the state of the Australian economy, particularly regarding consumer behavior and investment trends.

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Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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