AUD/USD: Trading the Australian jobs Nov 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 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.

After two sharp declines, the indicator rebounded in September, posting a gain of 9.1 thousand. However, this  was well short of the estimate of 15.2 thousand. The markets are expecting a gain another strong gain in October, with an estimate of 10.3 thousand.

Sentiment and Levels

The impressive Aussie rally, which began in September when the currency was below the 90 level, may have run out of steam. The RBA continues to state that the Australian dollar is overvalued,  but has  been reluctant to  cut interest rates.  With  QE tapering unlikely before 2014,  the QE uncertainty which was has been weighing on the dollar has eased, which could bolster the US dollar.  So, the overall sentiment is bearish on AUD/USD towards this release.

Technical levels from top to bottom: 0.9751, 0.9670, 0.9556, 0.9428,  0.9283 and 0.9180.

5 Scenarios

1. Within expectations: 8.0K to 13.0K: 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:  13.1K to 17.0K: A strong reading could push the pair above one resistance  level.
3. Well above expectations: Above 17.0K: A sharp rise in employment numbers could propel AUD/USD upwards, and a second resistance line could be broken.
4. Below expectations: 4.0K to 7.9K: A lower than expected reading could pull the pair downwards, with one support level at risk.
5. Well below expectations: Below 4.0K: A very poor reading would likely hurt confidence in the Australian economy  and  AUD/USD could break a second support level.

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

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