Downbeat Despite Data

AUD/USD came under pressure in early Asia as USD caught a bid in the wake of some headlines that US House Speaker Pelosi will bring Trump impeachment legislation next week.

• AUD/USD down some 35 pips at 0.7722, breaking below Friday's low. There is chatter of sell stops offset against 0.7725 strikes with AUD 1.23bn rolling off today.
• Earlier in the session Melbourne Institute Inflation for December printed 0.5% M/M and 1.5% Y/Y, both slightly improved from November.
• The final print for November Retail Sales showed an increase of 7.1%, slightly higher than the 7.0% expected. The figure was boosted by Black Friday sales and by the state of Victoria emerging from lockdown.
• Elsewhere the RBA announced it would buy AUD 2bn of bonds under its purchase programme. The RBA resumes purchases today after a scheduled break over the festive period, it it last bought bonds on Dec. 23.
• From a technical perspective the pair breached 0.7640, Dec 17 high and a bull trigger. This confirmed a resumption of the uptrend. The break higher last week reinforced bullish conditions, maintaining the bullish price sequence of higher highs and higher lows. The upside focus is on 0.7885 next, Mar 15, 2018 high. Moving average studies are in a bull mode too. Firm support is at 0.7643, Jan 1 low and near term support at 0.7690 the Jan 5 intraday low.