Aussie retails sale preview - how will AUD/USD react?

AUD/USD is trying to stabilize below the 0.76 handle after a US session that was friendly to the US dollar bulls, recovering from 0.7568 ahead of key retail sales.

This will be an interesting number given the recent preemptive move from the RBA who decided to cut interest rates, despite an economy that was growing modestly on target for the RBA's 3% GDP. However, inflation was apparently of concern below their target of between 203% and moreover, the strength of the aussie dollar may now otherwise be curbed given the RBA's easing bias while former RBA governor, Edwards, explained that the RBA still have many more tools at their disposal should they need to use them.

Analysts at ANZ expects an above-market retail sales print today, which they said could drive a knee-jerk reaction higher. "Any reaction is unlikely to be sustained, however, given the SoMP and US non-farm payrolls are released on Friday."

AUD/USD levels to monitor

The 0.76 handle is a point of equilibrium currently with recent highs at 0.7636 and lows at 0.7484. Current price is 0.7589, with resistance ahead at 0.7593 with a daily High of 0.7609, (Weekly High), 0.7617 (Yesterday's High) and 0.7668 (Weekly Classic R1). 

Next support to the downside can be found at 0.7588 (Daily Open), 0.7588 (Hourly 20 EMA), 0.7584 (Daily Low), 0.7579 (Daily Classic PP) and 0.7568 (Yesterday's Low). Looking at price patterns, we can see a Piercing Line 1-hour candlestick formation.