AUD/USD: Trading the Australian jobs May 2015

Australian Employment Change, which is released monthly, provides a snapshot of the health of the Australian labor market. A reading which is higher than the market forecast is bullish for the Australian dollar.

Here are the details and 5 possible outcomes for AUD/USD.

Published on Thursday at 1:30 GMT.

Indicator Background

Job creation is one of the most important leading indicators of overall economic activity. Thus, the release of Employment Change  is a market-mover which can affect the movement of AUD/USD.

Employment Change posted an excellent gain of 37.7 thousand in  March, crushing the estimate of 14.9 thousand.  The markets are expecting a much smaller gain in the April report, with the estimate standing at 4.0 thousand.

Sentiment and Levels

The  RBA lowered rates  this week  to a record low of 2.0%, as the RBA continues to take an opposite monetary stance to that of the Federal Reserve, which is expected to raise rates later  in  the year.  The Aussie has not been able to make up ground against the greenback, despite some disappointing US numbers of late. So, the overall sentiment is bearish on AUD/USD towards this release.

Technical levels from top to bottom: 0.8150, 0.8077, 0.7978, 0.7692,  0.7601 and 0.7528.

5 Scenarios

1. Within expectations: 1.0K to 7.0K: In this scenario, AUD/USD could show some slight fluctuation, but it is likely to remain within range, without breaking any levels.
2. Above expectations: 7.1K to 11.0K: A strong reading could push the pair above one resistance level.
3. Well above expectations: Above 11.0K: A sharp rise in employment numbers could propel AUD/USD upwards, and two or more resistance lines could be broken.
4. Below expectations: -3.0K to +0.9K: A lower than expected reading could pull the pair downwards, with one support level at risk.
5. Well below expectations: Below -3.1K: A very poor reading will likely hurt confidence in the Australian economy  and  AUD/USD could break two or more support levels.

For more on the Aussie, see the AUD/USD forecast.

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