AUD/USD Outlook: Aussie rebounds on positive housing data

• Australian house prices rose in August, continuing the upward trend.
• Investors are pricing in a 78% chance of an RBA cut in December.
• Experts anticipate an improvement in the US labor market in August.

The AUD/USD outlook shows bullish sentiment as the Aussie recovers from upbeat Australian housing data. At the same time, the dollar fell from recent peaks as investors awaited the crucial US non-farm payrolls report.

–Interested in learning more about day trading brokers? Check out our detailed guide –

Data on Monday revealed that Australian house prices rose in August, continuing the upward trend that had developed. National home prices rose 0.5% during the month, on top of a 0.3% increase in the previous month. The figures indicated an increased demand for housing.

It also reduced the likelihood of a rate cut by the Reserve Bank of Australia this year. Investors are currently pricing in a 78% chance of a December cut. Meanwhile, policymakers predict the first cut will take place next year.

On the other hand, markets are expecting a Fed rate cut in September. The only uncertainty is the size of the rate cuts. Consequently, the upcoming non-farm payrolls report will play a significant role in guiding the extent of rate cuts.

The previous jobs report pointed to a weak labor market that pushed investors to price in a 50bp rate cut. However, in August, experts anticipate an improvement in the labor market. Job growth could rise by 165,000, while the unemployment rate could fall to 4.2 percent. If that is the case, the Fed will likely implement a 25 bps rate cut. On the other hand, if the labor market continues to deteriorate, investors will expect a more aggressive Fed.

Key AUD/USD events today

Market participants are not expecting any key reports today. As a result, the pair could strengthen.

AUD/USD Technical Outlook: Bearish pressure below 0.6800

Technically, the AUD/USD price is retesting the 30-SMA resistance after a recent breach. The price traded in a solid bullish trend that failed to break the critical psychological level of 0.6800. The bullish momentum faded and the RSI showed a bearish divergence with the price.

–Interested in learning more about automated trading? Check out our detailed guide –

The bears took control when the price broke the SMA and the RSI dropped below 50. However, the price needs to break below the 0.6700 support to make a lower low and confirm a reversal. If it fails to do so, the bulls could come back stronger to make a new high above the 0.6800 resistance level.

Want to trade forex now? Invest at eToro!

67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.