• Data on Thursday showed the core PCE price index increased by 0.3%.

• US initial jobless claims fell to 216,000, missing estimates of 229,000 claims.

• Economists are not expecting a rate cut in Australia until next year.

The AUD/USD outlook shows a bearish sentiment as the dollar gains ground ahead of the crucial US nonfarm payrolls report. Meanwhile, a Reuters poll revealed that economists expect the Reserve Bank of Australia to hold rates on Tuesday.

The dollar has fluctuated due to uncertainty ahead of crucial US data and the presidential election. Data on Thursday showed the core PCE price index increased by 0.3%, in line with expectations. As a result, there was little change to rate-cut expectations. Meanwhile, initial jobless claims fell to 216,000, missing estimates of 229,000 claims. The employment data indicated a tight labor market, in line with recent upbeat reports, boosting the dollar.

The US economy has remained resilient in the face of high interest rates. As a result, markets have slashed expectations for an aggressive Fed rate-cutting cycle. At the same time, policymakers have assumed a more cautious tone. Meanwhile, there is a higher likelihood that the central bank will implement only one rate cut this year. However, this outlook will depend on incoming data.

Today, the US will release the nonfarm payrolls report, showing job growth in October. Economists expect employers to hire 106,000 workers during the month. Meanwhile, the unemployment rate might hold steady at 4.1%. Better-than-expected numbers will lower Fed rate cut expectations, boosting the dollar. On the other hand, if employment is poor, rate-cut bets will increase and put downward pressure on the greenback. Nevertheless, caution will remain as markets await the presidential election.

Meanwhile, economists are not expecting a rate cut in Australia until next year. Major local banks are forecasting the first cut in February. Further delays will keep the Aussie steady against its peers.

AUD/USD key events today

• US average hourly earnings m/m
• US nonfarm employment change
• ISM manufacturing PMI

AUD/USD technical outlook: Bears maintain control after 30-SMA retest

On the technical side, the AUD/USD price is falling after finding resistance at the 30-SMA. The price has traded in a strong downtrend below the SMA and recently broke below the 0.6600 support level. Meanwhile, the RSI has stayed below 50, favoring bearish momentum.

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After making a new low, AUD/USD rose to retest the SMA. Currently, it is bouncing lower, with bears eying the 0.6501 level. A lower low will strengthen the bearish bias.

https://www.forexcrunch.com/blog/2024/11/01/aud-usd-outlook-dollar-soars-ahead-of-us-nfp/