Short AUDJPY on Retail Sales and PMI

AUDJPY, H4               

It’s an important week for the AUD and NZD with both countries central banks reporting interest rate decisions.  However, before that we have had disappointing data from Australia and China overnight.

Australian retail turnover fell 0.1 per cent in December 2016, seasonally adjusted, according to the latest Australian Bureau of Statistics (ABS) Retail Trade figures. This follows a rise of 0.1 per cent in November 2016. Expectations were for a rise to 0.3%. In seasonally adjusted terms, there were falls in household goods retailing (-2.3 per cent), and other retailing (-0.2 per cent). These falls were offset by rises in food retailing (0.5 per cent), clothing, footwear and personal accessory retailing (1.4 per cent), cafes, restaurants and takeaway food services (0.2 per cent), and department stores (0.3 per cent).  The fall in household goods retailing is the result of a fall in the Hardware, building and garden supplies retailing industry subgroup, which fell 6.6 per cent in December after rises in each of the previous four months. Online retail turnover contributed 3.8 per cent to total retail turnover in original terms. There was better news on inflation as the inflation gauge ticked up mildly to 0.6% and ANZ job advertisements were up 4.0% but the previous month has been revised down to -2.2%.

Additionally, the AUD came under pressure from the Caixin Services PMI number for China which also missed expectations coming in at 53.1 compared to 53.4 last time and expectations of a rise to 53.6.  All the negative AUD news triggered a SHORT position on the 4 hour candle; entry was at 86.21 with a target of 30 pips from the 14 period ATR at 85.91. Resistance to a further down move is the 20 and 50 period moving averages at 86.20 and 86.14 respectively.

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Stuart Cowell

Senior Market Analyst


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