• Australian home prices increased in August, continuing the developed uptrend.
• Investors are pricing 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 after upbeat Australian housing data. At the same time, the dollar eased from its recent peaks as investors awaited the crucial US nonfarm payrolls report.

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Data on Monday revealed that Australian home prices increased in August, continuing the developed uptrend. National home prices rose by 0.5% during the month, above the previous month’s increase of 0.3%. The figures pointed to increased demand for housing.

Moreover, it reduced the likelihood of a Reserve Bank of Australia rate cut this year. Investors are currently pricing a 78% chance of a cut in December. Meanwhile, policymakers project the first cut coming next year.

On the other hand, markets are awaiting a Fed rate cut in September. The only uncertainty is the size of rate cuts. Consequently, the upcoming nonfarm payrolls report will play a significant role in guiding on the magnitude of rate cuts.

The previous jobs report indicated a weak labor market that pushed investors to price a 50-bps rate cut. However, in August, experts anticipate an improvement in the labor market. Job growth might increase by 165,000, while the unemployment rate might ease to 4.2%. If this is the case, the Fed will likely implement a 25-bps rate cut. On the other hand, if the labor market shows further deterioration, investors will expect a more aggressive Fed.

AUD/USD key events today

Market participants do not expect any key reports today. As a result, the pair might consolidate.

AUD/USD technical outlook: Bearish pressure below 0.6800

On the technical side, the AUD/USD price is retesting the 30-SMA resistance after a recent breach. The price has traded in a solid bullish trend that failed to go beyond the 0.6800 critical psychological level. Bullish momentum faded, and the RSI showed a bearish divergence with the price.

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Bears took control when the price broke the SMA, and the RSI dipped below 50. However, the price must break below the 0.6700 support to make a lower low and confirm a reversal. If it fails to do this, bulls might return stronger to make a new high above the 0.6800 resistance level.

https://www.forexcrunch.com/blog/2024/09/02/aud-usd-outlook-aussie-rebounds-on-positive-housing-data/