In spite of the fact the dollar is not in its best shape, AUD/USD is inching south. The Aussie has been under pressure ever since the Asian session, when Australia published the retail sales report with highly disappointing results.
Sales fell 0.6% to 2.1% m/m. Here we are. The steepest decline since March 2013 and the weakest annual growth in sales since July 2013. This week RBA has left rates on hold at its record low 1.50%. That was quite a surprise… to no one.
But the fact is that too-strong Aussie may have damaging effects on the economic growth. So, the firstly will try to talk AUD down. If this measure doesn’t work, RBA may pull the trigger. And as a result, we may see a broader slide.
AUD found support around August, 15 lows at 0.7807/16. In case it breaks the level, next target will be the 0.7790 area.