AUD/USD pierces 0.7100 even as Australia Retail Sales match forecasts, US PCE Inflation eyed

• AUD/USD takes the bids to refresh intraday high despite no surprises from Aussie data.
• Australia’s seasonally adjusted Retail Sales for April march 0.9% MoM Forecasts.
• Market sentiment sours amid fears emanating from China, US dollar stays pressured around monthly low.
• US PCE Price Index, risk catalysts eyed for fresh impulse.

AUD/USD takes the bids to approach the weekly top surrounding 0.7130 during Friday’s Asian session. In doing so, the Aussie pair fails to justify the Retail Sales data that matched market forecasts. The reason could be linked to the fresh monthly low o the US Dollar Index (DXY).

Australia’s preliminary readings of seasonally adjusted Retail Sales for April match the 0.9% market consensus, versus 1.6% prior.

Read: Aussie Retail Sales arrives at 0.9% as expected, AUD/USD perky around 0.7105

It’s worth noting, however, that the sour sentiment challenges AUD/USD buyers due to the pair’s risk-barometer status.

Among the negatives are the latest news from Bloomberg saying, “US plans economic talks with Taiwan in latest challenge to China.” On the same line are the fears of global economic slowdown, mainly due to covid-led lockdown in China and the Russia-Ukraine crisis.

Alternatively, softer US data weighed on the US dollar as market participants welcomed the lack of uncertainty over the Fed’s next move with zeal, showing confidence in the 50 bps rate hikes during the next two meetings.  That said, the US preliminary Q1 2022 Annualized GDP eased to -1.5%, below -1.4% prior and -1.3% forecasts, whereas the Pending Home Sales slumped in April, to -3.9% versus -2.0% forecast.

Amid these plays, the US 10-year Treasury yields remained indecisive around 2.75% while the S&P 500 Futures print mild losses around 4,050, down 0.10% intraday at the latest.

Moving on, the US Dollar Index weakness and mixed catalysts may test AUD/USD moves ahead of the US Core Personal Consumption Expenditure (PCE) Price Index for April, expected at 4.9% YoY versus 5.2% prior.

Read: US Core PCE Preview: Why there is room for a dollar-lifting upside surprise

Technical analysis

Unless breaking convergence of the 21-DMA and previous resistance line from early April, around 0.7030, AUD/USD appears capable of refreshing its weekly high, currently around 0.7130.