AUD/USD: Trading the Australian jobs Aug 2013

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 a  strong gain of 10.3 thousand in the July release,  crushing  the estimate of 0.3 thousand.  The estimate for the  August reading is not as strong, with an estimate of  6.2 thousand. Will the indicator again surprise the markets and beat the forecast?

Sentiment and Levels

The Aussie keeps on sliding, and the 90 level easily gave way last week as the US dollar continues to surge. The downward trend could continue unless Australian releases impress the markets. The US economy appears to be  on the right track and increasing speculation about QE tapering in September could give the US dollar some broad strength.  So, the overall sentiment is bearish on AUD/USD towards this release.

Technical levels from top to bottom: 0.9180, 0.9041, 0.90, 0.8893,  0.8747 and 0.8580.

5 Scenarios

1. Within expectations: 3.0K to 9.0K: 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: 9.1K to 13.0K: A strong reading could push the pair above one resistance level.
3. Well above expectations: Above 13.0K: A sharp rise in employment numbers could propel AUD/USD upwards, and two or more resistance lines could be broken.
4. Below expectations: -1.0K to 2.9K: A lower than expected reading could pull the pair downwards, with one support level at risk.
5. Well below expectations: Below -1.0K: 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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