AUD/USD: Upbeat Aussie data accelerates recovery from session lows

• AUD/USD erases losses after Australia reports a big jump in retail sales. 
• Aussie dollar is likely to continue tracking the equity markets in the near term. 
• RBA seems concerned over the AUD's three-month uptrend. 

AUD/USD jumped 10 pips to 0.6860, extending the recovery from the session low of 0.6840 after Australia reported a sharp rise in retail sales in May. 

Consumer spending, as represented by retail sales, rose 16.3% in May, having declined by 17.7% in the preceding month, the preliminary data released at 01:30 GMT showed. Consumers likely drove retail sales higher on revenge spending as the coronavirus-induced lockdown restrictions were partially eased in May. The final retail sales figure for May would be released next week. 

While the AUD/USD pair has erased losses, it may have a tough time printing stronger gains if the global equities trade in the red. At press time, the futures tied to the S&P 500 are reporting a 0.20% rise and major Asian indices are flashing moderate gains.

"AUD currently trades broadly with risk markets," analysts at JP Morgan noted in their outlook and added that, "the tug of war between the second coronavirus wave and global stimulus for stock market directionality will be won by the latter, which should keep AUD sell-offs limited."

The AUD/USD pair has gained nearly 1,500 pips over the last three months and the Reserve Bank of Australia (RBA) looks concerned by the AUD's appreciation. "It would certainly be unhelpful if the rate was back up over 70 cents, that's for sure," RBA's board member Ian Harper told Bloomberg early Friday. As a result, the AUD bulls may refrain from building aggressive longs and pushing the AUD/USD pair above 70 cents. 

The pair printed a high of 0.7064 on June 10 before falling back to 0.6776 on June 15.

Technical levels