/aʊ/ in cloud is the main value, but ou also gives /ʌ/, /uː/, /ʊ/ and /ɔː/. One of the most variable teams in English.
Diphthongs
ou TEAM_OU_01
Useful pattern · Low reliability · Very common · Intermediate · Reading
/aʊ/ as in cloud: cloud, house, out
/ʌ/ as in touch: touch, young, country
/uː/ as in soup: soup, group, you
/ʊ/ as in could: could, would, should
/ɔː/ as in four: four, pour, your
Where Wiggler teaches it: Skill 10: Diphthongs & Variant Vowels
Child explanation
Ou usually says /aʊ/ like in cloud. But in touch it says /ʌ/, and in soup it says /uː/. Try /aʊ/ first.
The rule
Try /aʊ/ first — it is the largest group by far. The other values are best learned as small named sets rather than as alternatives to guess between.
What is really going on
ou entered English from Norman French, where it spelled /uː/. The Great Vowel Shift moved most instances to /aʊ/, but words borrowed later, or protected by a following consonant, kept earlier values. The result is five groups of very uneven size, with /aʊ/ dominant and the rest small enough to learn as sets.
Position in the word
Middle of a word — All values occur here. For example: cloud, touch, soup, could.
End of a word — Rare; you and thou are the main cases. For example: you, thou.
Made-up words that follow the rule. A child who reads these has the pattern rather than the vocabulary.
floud, shount, proud
Exceptions
ou as /ʌ/: touch, young, country, cousin, double, trouble, enough, rough, tough, couple. A Norman French spelling for a vowel that later became /ʌ/.
ou as /uː/: soup, group, you, youth, route, through, wound. Later French borrowings that kept the original French value.
The ould family: could, would, should. Three words, all with a silent l, all /ʊ/.
Contrast pairs
cloud versus could — The main value against the ould family.
out versus you — Two values in two very common words.
found versus young
Teacher note
Teach /aʊ/ as the default and the rest as named families rather than as options. Could, would and should are frequent enough to be taught as heart words before ou is formally introduced, and treating them that way keeps the ou lesson cleaner.