AUD/NZD headed for a break of critical support post retail sales?

Currently, AUD/NZD is trading at 1.0944, down -0.21% on the day, having posted a daily high at 1.0994 and low at 1.0943.

AUD/NZD dropped to test the midpoint of the handle and through the 200 sma at 1.0952 on the back of the retail sales data from Australia. 

Australia retail sales post biggest fall since March 2013

Retail sales unexpectedly contracted by 0.6% in September while the consensus was for a positive 0.3% number. At the same time, the Aussie trade surplus widened to AUD $989 million, beating the estimate of AUD $850 million. Import growth stalled, while exports rose 1% m/m seasonally adjusted.

AUD/NZD levels

The price is testing the ascending channels support line while 1.0921 is a critical level ahead of 1.0830 where the price bounced from on the 29th September. To the upside, 1.0980 would re-establish the bullish case.

AUD/NZD 1-3 month: 

"September’s downward correction should give way to a resumption of the trend rise which started in June, and test 1.12, contingent on AU commodity prices recovering and risk sentiment remaining elevated," analysts at Westpac explained. 

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