AUD/USD: Trading the Australian jobs Apr 2013

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The Australian Employment Change indicator, released monthly, is an important leading indicator which often has a significant impact on the markets. Employment figures are important as they provide a snapshot of the health of the economy. 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, Employment Change should be treated as a market-mover which can affect the movement of AUD/USD.

Employment Change was nothing short of spectacular in March, rocketing to 71.9 thousand new jobs. The estimate stood at 9.5 thousand. The picture looks to be very different in August, as the markets are bracing for a decline of 6.7 thousand. Will the indicator surprise the markets with another strong reading?

Sentiment and Levels

Although Australia posted some solid numbers last week, the markets are nervous about developments in Europe and the US. In Europe, there is uncertainty about the ramifications of the Cyprus bailout, while continuing weak numbers out of the US are raising concerns about the recovery. These concerns are not good news for riskier currencies like the Australian dollar. If the US releases rebound this week, we could see the Australian dollar move upwards. On the downside, the markets are expecting weak Australian employment numbers, and if this materializes, the Aussie could lose some ground. So, the overall sentiment is neutral on AUD/USD towards this release.

Technical levels from top to bottom: 1.0739, 1.0605, 1.0508, 1.0416, 1.0371 and 1.0326.

5 Scenarios

  1. Within expectations: -10.0K to -2.0K: 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: -1.9K to 2.0K: A strong reading could push the pair above one resistance level.
  3. Well above expectations: Above 2.0K: A sharp rise in employment numbers could propel AUD/USD upwards, and two or more resistance lines can be broken.
  4. Below expectations: -10.1K to -14.1K: A lower than expected reading could pull the pair downwards, with one support level at risk.
  5. Well below expectations: Below -14.1K: A very poor reading will hurt confidence in the Aussie and AUD/USD could break two or more support levels.

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

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About Author

Kenny Fisher - Senior Writer A native of Toronto, Canada, Kenneth worked for seven years in the marketing and trading departments at Bendix, a foreign exchange company in Toronto. Kenneth is also a lawyer, and has extensive experience as an editor and writer.

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