The AUD/USD has been strong recently, but that looks like it might be coming to an end now.

A weaker than expected retail sales result is a real slap for the AUD ahead of a massive session with the RBA still to come.

Retails Sales for December came in at -0.4% vs 0.0% expected. The market was a little worried about this number given some anecdotal results and some downgraded earnings from some of the main retail names in recent weeks. Sure enough, the fear was well justified.

The result comes ahead of the RBA interest rate decisions which will be released later today. While no change is expected, there are many now looking for more neutral talk on rates going forward, to open the door should we need to see a reduction.

At the same time, the Royal Commission into the banking sector in Australia has been released and equity markets are seeing a huge rally on the back of the report not being as hard on the banks as many expected.

Aussie Outlook

The AUD/USD tagged the major level at 0.7300 and is now back below 0.7200 and looking weak.

Clearly, this is a very important level for the AUD as this has been in place for months.

0.7050 and then 0.7000 are my next two key support levels below, with 0.7200 remaining as key support.

0.7300 is R1 and the most recent highs sitting at 0.7400.

This is a pretty big day in the markets for the AUD/USD so keep this one on your radar.