• Australia’s economy added 64,100 jobs in September, well above the forecast of 25,000.

• The Aussie pulled back as China’s stimulus disappointed.

• The US dollar remained solid as investors priced a likely Trump win in November.

The AUD/USD outlook shows a brief surge due to an upbeat employment report from Australia. However, prices pulled back amid disappointment in China’s economic stimulus. Meanwhile, the dollar got new life as market participants priced the probability of a Trump win. 

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Data on Thursday revealed that Australia’s economy added 64,100 jobs in September, well above the forecast of 25,000. At the same time, the unemployment rate held steady at 4.1% compared to estimates of 4.2%. The robust labor market numbers pushed back the timing for the first RBA rate cut, boosting the Aussie. 

However, the rally was short-lived as traders absorbed a disappointing announcement by China. The country’s top officials have pledged to support the fragile housing market. However, they failed to announce any new stimulus to boost the sector. As a result, markets were disappointed, with the Aussie dropping along with the Yuan.

Elsewhere, the US dollar remained solid as investors priced a likely Trump win in November. The upcoming election outcome could change fiscal policy, impacting monetary policy. Notably, Trump’s policies will likely increase inflation, leading to a pause in Fed rate cuts. 

The dollar has had a bullish run due to upbeat US data. The economy has shown resilience, and inflation beat forecasts in September. As a result, policymakers have taken a cautious stance. Market participants are gearing up for the retail sales report for more ideas on Fed rate cuts.

AUD/USD key events today

• US core retail sales m/m
• US retail sales m/m
• US unemployment claims

AUD/USD technical outlook: Price action signals looming reversal

On the technical side, the AUD/USD price trades below the 30-SMA, indicating a bearish trend. At the same time, the RSI supports bearish momentum below the pivotal 50 line. However, when the price broke below the 0.6700 support, momentum faded. The RSI made a bullish divergence, signaling a looming reversal. 

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Furthermore, price action showed a doji and a bullish engulfing candle. The patterns show indecision followed by a surge in bullish momentum. However, bulls must break above the 0.6700 resistance and the 30-SMA to confirm a reversal. Otherwise, bears might breach the 0.6650 level.

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