AUD/USD picks up a bid on above-forecast Aussie Retail Sales

• Above-forecast Aussie retail sales are boding well for the Australian dollar. 
• AUD/USD has turned positive and is currently trading at session highs near 0.6870. 
• Further gains may remain elusive if geopolitical tensions escalate.

The bid tone around the Aussie dollar has strengthened following the release of a better-than-expected Australian retail sales data.

Consumer spending, as represented by retail sales, grew 0.9% in November, beating the forecast for a 0.4% rise by a big margin and up from October's 0% reading. 

The AUD/USD pair jumped higher from 0.6855 to 0.6870 in response to the upbeat data released at 00:30 GMT and is currently trading at 0.6868.

The data has come a day after NAB's Online Retail Sales Index for November showed 'Black Friday' online retail sales rose 62% over the month, compared to the
same sales event in 2019.

The big beat on expectations may force markets to scale back expectations for an RBA rate cut in February, in which case the AUD may extend gains. At press time, markets are pricing more than 60 percent of a rate cut next month. 

Further gains, however, may remain elusive if the geopolitical tensions escalate. Reports of an airstrike in eastern Syria against a convoy of an Iranian backed Iraqi militia are doing the rounds and few are assuming that Israel is involved. 

Technical levels