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When is China's Retail Sales, and how could it affect the AUD/USD?

China Retail Sales overview

Friday at 02:00 GMT sees China's latest annualized Retail Sales and Industrial Production figures, with retail expected to come in slightly above the previous period's 8.6% at 8.8%, while Industrial Production is seen holding steady at 5.9%. With China's domestic economy dwarfing Australia's and being Australia's closest trading partner, a continued slowdown in China's economy bodes poorly for the Aussie, and Antipodean investors will be hoping for a good or at least on-balance reading for Friday, as the Australian economy struggles to maintain growth of its own.

How could it affect the AUD/USD?

The Aussie has remained caught in a bearish zone for some time, though the pair is currently awaiting a jolt in either direction, according to FXStreet's own Valeria Bednarik: "the 4 hours chart for the pair shows that the pair remains stuck around the 23.6% retracement of its latest decline, still meeting sellers around the 200 SMA, and above a directionless 20 SMA. The 100 SMA is directionless, converging with the 38.2% retracement of the same slide at around 0.7260. Technical indicators in the mentioned chart have lost upward strength and are currently pressuring their midlines, lacking enough strength to confirm another leg south. Nevertheless, repeated failure to advance could discourage bulls, yet the pair will only turn bearish on a break below 0.7170."

Support levels: 0.7200 0.7170 0.7140  

Resistance levels: 0.7255 0.7300 0.7340

Key notes

AUD/USD analysis: higher high daily basis, but confined to a tight range

About China Retail Sales

The Retail Sales report released by the National Bureau of Statistics of China measures the total receipts of the retailed consumer goods. It reflects the total consumer goods that the various industries supply to the households and social groups through various channels. It is an important indicator to study the changes in the Chinese retail market and reflecting the degree of economic prosperity. In general, A high reading is seen as positive (or bullish) CNY, while a low reading is seen as negative (or bearish) for the CNY.

About China Industrial Production

Industrial output is released by the National Bureau of Statistics of China. It shows the volume of production of Chinese Industries such as factories and manufacturing facilities. A surge in output is regarded as inflationary which would prompt the People’s Bank of China would tighten monetary policy and fiscal policy risk. Generally speaking, if high industrial production growth comes out, this may generate a positive sentiment (or bullish) for the CNY, whereas a low reading is seen as negative (or Bearish) for the CNY.

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