Bearish Signal in AUDUSD Ahead of US Retail Sales

Aussie Under PressureThe Aussie Dollar continues to linger below the .6520 level following the downside break in early August. The move lower has been laboured, on the back of the impulsive break lower we saw across July. With this in mind, the pair is perhaps vulnerable to a near-term short squeeze if we’re unable to break convincingly lower soon. However, any pop higher will likely present better levels to sell into. The RBA looks to be sidelined now with regards to tightening given that the unemployment rate is remaining around 3-month highs at 3.7%.Fed Hikes Still a RiskOn the US Dollar side of the equation, yesterday’s US CPI print shows that the Fed isn’t necessarily done with tightening. Pricing for November/December hikes have jumped to around 40% on the back of the data, keeping USD supported near-term. Looking ahead today, focus will now shift to US PPI and retail sales, both key readings. If we see further data strength today, this is likely to weigh on AUD near-term, further supporting the chances of another Fed hike this year. Meanwhile, any downside surprise in today’s data should see AUD trading higher near-term.Technical ViewsAUDUSDThe sell off in AUDUSD has seen the pair breaking below the .6520 level recently. However, the downside move has lost momentum for now with price congesting below that level over the last month. To the downside, .6273 is the next support to note while .6520 remains the key resistance to watch for now, keeping focus on further downside while this this level holds. Interestingly, we have a bearish signal in the Signal Centre today set at that level targeting a move back down through .6430 and below to .6360.