RBA Somp and Aussie retails sales preview - what to expect in AUD/USD?

AUD/USD has been propelled to recent highs on the back of a soft greenback as investors remains cautious around the elections and US 10yr treasury yields were ranging between 1.79% and 1.83% in a phase of consolidation ahead of the jobs data from the US in nonfarm payrolls. Stocks tumbled,  gold rallied, and the Aussie was bid on the back of a narrowing trade deficit yesterday with an uptick in the Chinese service PMI to 52.4 in October from previous 52.0. High iron and coal prices are also underpinning the AUD. 

Aussie retail sales and RBA statement on monetary policy

We now have retail sales on the cards for today along with the RBA statement on monetary policy that will provide updated forecasts and discussion on growth and inflation.

Recall, that the RBA kept the cash rate on hold at 1.5% as expected with little change to the statement compared to Sep and Oct. However, there were some hawkish additions - upgrading near-term Chinese activity, noting ‘brisk’ house price inflation, and policy settings are expected to generate ’sustainable’ growth and higher inflation but overall, the economy is forecast to grow at close to its potential rate, and inflation is expected to pick up gradually, noted analysts at TD Securities, "We expect unchanged GDP and CPI projection in Friday’s Statement on Monetary Policy, and leaves the RBA comfortably on hold for now."

"Australian retail sales should be boosted by food prices in Sep, a gain of 0.7% anticipated (consensus is 0.4%).. However quarterly volumes are expected to be weak, with a gain of just 0.1%," explained analysts at Westpac. 

AUD/USD level to monitor

"AUD/USD 1-3 month: While further gains to around 0.77 are possible during the month ahead, driven in part by the faltering US dollar and yield-chasing flows, the AUD is losing energy (perhaps a reflection of its declining yield advantage). By year end, there’s a case for a correction towards 0.74 if the Fed tightens in December as we expect," - Westpac

Meanwhile, the current price is 0.7682, with resistance ahead at 0.7688 (Weekly Classic R1), 0.7689 (Daily Classic R1), 0.7689 (Daily High), 0.7718 (Daily Classic R2) and 0.7722 (Monthly High). Next support to the downside can be found at 0.7680 (Yesterday's High), 0.7671 (Hourly 20 EMA), 0.7661 (Daily Open), 0.7660 (Weekly High) and 0.7651 (Daily Classic PP).