AUD/USD: Trading the Australian jobs Jul 2013

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 gained a modest 1.1 thousand last month,  but this easily beat the estimate of -9.8 thousand. The markets are expecting an even smaller gain this time around, with an estimate of just 0.3 thousand. Will the indicator surprise the markets and beat the forecast?

Sentiment and Levels

AUD/USD continues to be a tale of two currencies. The Aussie  can’t seem to find its footing,  while the US  dollar has been looking strong.  Talk of tapering QE and solid US numbers, notably employment data, has seen the dollar improve against all the major currencies.  If Australian data does not impress the markets, we could see the Aussie lose more ground. So, the overall sentiment is bearish on AUD/USD towards this release.

Technical levels from top to bottom: 0.9549, 0.9428, 0.9283, 0.9171, 0.9041 and 0.9000.

5 Scenarios

1. Within expectations:  -3.0K to 3.0K: 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:  3.1K to 6.1K: A strong reading could push the pair above one resistance  level.
3. Well above expectations:  Above 6.1K: A sharp rise in employment numbers could propel AUD/USD  upwards, and two or more resistance lines can be broken.
4. Below expectations:  -6.0K to -3.1K: A lower than expected reading could pull the pair downwards, with one support level at risk.
5. Well below expectations: Below -6.0K: A very poor reading  could 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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