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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 00:30 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 a decline of 5.1 thousand in September, the first  loss in jobs  since April. This figure surprised the markets, which had expected a strong gain of 7.2 thousand. October is expected to be much stronger, with an estimate of 14.8 thousand. Will the indicator match or beat this rosy prediction?

Sentiment and Levels

The US posted an excellent NFP release on Friday,  meaning  that a  Fed rate hike is more likely in December. This is a positive  development for the US dollar, and the  Australian currency, which has lost some 350 points in the past month, will have a tough time stemming the US dollar rally.  So, the overall sentiment is  bearish on AUD/USD towards this release.

Technical levels from top to bottom: 0.7284, 0.7160, 0.7100, 0.7000, 0.6900 and 0.6775.

5 Scenarios

  1. Within expectations: 12.0K to 18.0K: 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: 18.1K to 22.0K: A strong reading could push the pair above one resistance level.
  3. Well above expectations: Above 22.0K: A sharp rise in employment numbers could propel AUD/USD upwards, and two or more resistance lines could be broken.
  4. Below expectations: 8.0K to 11.9K: A lower than expected reading could pull the pair downwards, with one support level at risk.
  5. Well below expectations: Below 8.0K: A  weak  reading  will likely hurt confidence in the Australian economy,  and  AUD/USD could break below two or more support levels.

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