AUDUSD will see the latest Australian employment data released ahead of Thursday's Asian session.
AUDUSD – Daily Chart
The AUDUSD exchange rate has been trading in an uptrend channel since October, and the latest bearish move could see the US dollar power through the support.
The Aussie dollar dropped against the greenback on Wednesday after stronger-than-expected retail sales data in the United States. Retail sales increased by the most in almost two years in January after two consecutive monthly declines. Sales of motor vehicles and other goods helped to restart the US consumer economy.
The retail sales data follows Tuesday's inflation data which remained stubborn, despite a monthly dip. Further strength from the US consumer could see further speculation that the Federal Reserve will keep hiking rates to cool domestic demand.
Although resilient consumer spending is a positive sign for the economy's health, renewed demand for supply-constrained categories could add to inflation pressures, potentially eliciting more aggressive action from the Fed," said Kayla Bruun at Morning Consult.
US retail sales jumped 3.0% last month, the most significant increase since March 2021, after a steep 1.1% drop in December. Economists had expected a rise of 1.8%, with estimates in the 0.5% to 3.0% range.
The previous two-month drop in sales was blamed on early holiday shopping, which economists said had not been counted in government data.
According to an analysis of Bank of America's credit and debit card data, the Bank of America Institute reported a surge in spending in January. The institute said this showed "that while lower-income consumers are pressured, they still have solid cash buffers and borrowing capacity," noting "even for the lowest-income cohorts this should provide support for some time yet."
Australian employment data will be released ahead of the Asian trading session. Analysts are looking for a gain of 20k jobs in the economy after last month's loss of -14.6k jobs. The unemployment rate is expected to stay at 3.7%, and a weaker jobs number could fuel the AUDUSD test of uptrend support.
