AUD/USD: Trading the Australian jobs Dec 2011

The Australian employment change is an important leading indicator which often has a significant impact on the markets. Traders and analysts carefully examine employment figures in trying to determine the overall health of the economy.

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

Published on Thursday at 00:30 GMT.

Indicator Background

Job creation is one of the most important leading indicators of overall economic activity. The publication of the employment change indicator, which is released simultaneously with the unemployment rate, is highly anticipated by the markets. If the indicator is higher than the forecast, this is bullish for the Aussie.

In October, the indicator was up sharply, with an impressive reading of 20.4K. The markets were way off in their prediction of 10.1K. However, in November, the market forecast of 10.1K was right on target,   as this was the actual reading. The December forecast is at 10.6K. Will the market prediction again be correct?

Sentiment and Levels

The Australian economy is struggling with the global slowdown, particularly in China, Australia’s most important trading partner. Poor economic data in Australia and the raging debt crisis in Europe are weighing on the Australian dollar. So, the sentiment is bearish on AUD/USD towards this release.

Technical levels from top to bottom: 1.00, 0.9953, 0.9850, 0.9803, 0.97 and 0.9622.

5 Scenarios

1. Within expectations: 5K to 15K: 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: 16K to 21K: A reading above expectations would signal economic expansion,  and could  push the pair  above one  resistance level.
3. Well above expectations: Above 21K: A sharp rise in employment  numbers could propel the Aussie upwards, and two levels of resistance  or more can be broken.
4. Below expectations: -1K to 4K: A reading close to or in negative territory could pull the pair downwards, with one support level at risk.
5. Well below expectations: Below -1K: Another poor reading will hurt confidence in the Australian dollar, and AUD/USD could break two  support levels.

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