• The AUD/USD outlook shows easing fears of a US recession.
• The US economy grew by 2.4% last quarter, above estimates of a 2.3% expansion.
• Economists believe the RBA will keep interest rates unchanged next week.

The AUD/USD outlook shows easing fears of a US recession after an upbeat US GDP report, which has revived the dollar. However, trading remains thin amid uncertainty regarding Trump’s April tariffs. Meanwhile, a Reuters poll revealed that economists expect the RBA to hold on Tuesday and signal two more cuts this year. 

Data on Thursday revealed that the US economy grew by 2.4% last quarter, above estimates of a 2.3% expansion. This was the second upbeat report this week after the business activity data and eased fears of a rapid economic slowdown. However, the outlook for the future remains uncertain. If Trump continues imposing tariffs, the economy will eventually suffer. 

Market participants expect the US president to announce more tariffs come April 2. These might escalate and ignite new trade wars that would dim the outlook for growth. At the same time, inflation expectations would soar, keeping the Fed on a cautious path. 

On the other hand, economists in a Reuters poll believe the Reserve Bank of Australia will keep interest rates unchanged next week. Moreover, they believe the central bank will implement its next cut in May. Although inflation is in the 2-3% target band, underlying inflation remains high at 3.2% 

AUD/USD key events today

• Core PCE Price Index m/m
   

AUD/USD technical outlook: Choppiness after downtrend

(Click on image to enlarge)

On the technical side, the AUD/USD price has paused its decline and entered a period of correction between the 0.6200 support and the 0.6390 resistance. Bulls tried to take charge by pushing the price above the 30-SMA. However, they have failed to start making higher highs and lows, a sign that bears are still fighting to resume the previous downtrend. 

Within the correction, the price trades below the SMA, with the RSI under 50, suggesting a bearish bias. If this continues, the price will soon drop to the 0.6200 support level. A break below this level would confirm a continuation of the downtrend. 

On the other hand, if bulls return at any point, they will push the price back above the SMA to retest the 0.6390 resistance level. A break above this level would make a higher high, indicating a new bullish trend.

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