The AUD/USD outlook is bullish as the dollar eases ahead of US inflation data, which will shape the outlook for Fed rate cuts. Meanwhile, RBA rate cut expectations remained unchanged after data showed weaker retail sales in July. AUD/USD rose on Friday as investors positioned themselves before the core PCE price index report. The inflation measure will show whether price pressures are dropping fast enough to warrant a 50 bps rate cut. If not, the Fed will likely resort to a smaller 25 bps cut. Moreover, markets will start pricing a gradual rate-cutting cycle.On Thursday, data from the US revealed a robust economy. The GDP expanded by a bigger-than-expected 3.0% in the second quarter, increasing chances that the Fed will achieve a soft landing. At the same time, initial jobless claims came in lower than expected, showing a still-tight labor market. Consequently, the dollar rose. Meanwhile, data on Friday showed that Australia’s sales were flat in July, a drop from previous robust readings. Meanwhile, economists had expected a 0.3% increase. In June, retail sales jumped by 0.5%. The disappointing figures increased the likelihood that the next move for the Reserve Bank of Australia will be a rate cut. Nevertheless, after July’s upbeat inflation report, RBA rate cut expectations remained subdued. Investors are pricing an 80% chance of a rate cut in December. Meanwhile, policymakers are forecasting the first cut sometime next year. AUD/USD key events today
AUD/USD technical outlook: Price pauses as bullish momentum fades 
AUD/USD 4-hour chart On the technical side, the AUD/USD price is trading in a tight range near the 0.6800 critical psychological level. However, the bias is bullish since the price sits above the 30-SMA. At the same time, the RSI trades in bullish territory above 50. However, the RSI has shown weakness in the bullish trend. It has made a bearish divergence, a sign that the pair might be ready to reverse to the downside. If bears emerge, they might push the price below the 30-SMA to reverse the trend. Otherwise, bulls will regain momentum and break above 0.6800 to make a higher high.More By This Author:USD/JPY Price Analysis: Safe-Haven Demand Lifts DollarUSD/CAD Outlook: CAD Strengthens Amid Rising Oil PricesGBP/USD Price Analysis: Refreshes YTD Highs Amid Upbeat PMIs
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