The aussie received a boost overnight after February’s retail figures surprised the market with unexpected resilience. Retail sales grew by 0.8% vs a consensus of 0.2%, the strongest rise in the past 1 ½ year. This has provided much relief to the fear than economic slowdown had depressed household consumption. Despite RBA’s shift into a more dovish stance this week, decent data could provide cushion for widespread pessimism.
On the technical side, AUDUSD is pulling back towards the major resistance of 0.7130. We may expect stiff selling pressure in that congestion area. 0.7100 is the immediate support on the downside.
The sentiment-price correlation chart shows the sentiment retreating from its peak. Daily news sentiment is moving lower and in 70% of the last 10 occurrences price has fallen within 8 days.