Chinese data and Aussie retail sales preview: what to expect in AUD/USD?

AUD/USD is entering a critical month under pressure on the increased sentiment around a Fed hike while the DXY is table around the 96 handle while today holds two key events for the Aussie.

AUD/USD was flat in the close of the US session while commodities have also weigh along with the stronger greenback on the back of Fed officials in recent weeks increasing the sentiment  for a Fed hike. The Jackson Hole presented a speech from Yellen who was more optimistic about the recent improvement in the US economy and against a backdrop of the RBA who has recently changed their tone, the Aussie has been unable to sustain the August rally to 0.7831, while all eyes turn to the Chinese data and retail sales today and the nonfarm payrolls in the US session on Friday in the US.

Analysts at Westpac offered an insight to the Australian retail sales that is expected to have risen by a modest 0.3% in July as fierce discounting holds down nominal sales growth, especially for food. "Capex for Q2 should be weaker, led lower by mining spending. Equipment investment should be broadly flat, but with downside risks. See our Preview for scenarios on investment plans."

However, analysts at ANZ suggested that for today, the key data highlight will be China’s PMI numbers while the overnight focus will shift to the pulse of growth in the US with the ISM due. "That said, traded ranges are likely to be thin in the run-up to the NFP number on Friday."

AUD/USD levels to monitor

Technically,  Valeria Bednarik, chief analyst at FXStreet explained that in the 4 hours chart, the technical outlook favors the downside, as the price remains below a bearish 20 SMA, the Momentum indicator heads south within negative territory, whilst the RSI indicator holds flat around 37. Spot is presently trading at 0.7521, and next resistance can be seen at 0.7525 (Daily High), 0.7531 (Daily Classic PP), 0.7535 (Yesterday's High), 0.7561 (Daily Classic R1) and 0.7563 (Hourly 100 SMA). Support below can be found at 0.7518 (Daily Open), 0.7517 (Hourly 20 EMA), 0.7514 (Daily Low), 0.7511 (Weekly Classic S1) and 0.7510 (Monthly Low).  Regarding candlestick formations, we can see Dark Cloud Cover formation on the 1-hour.