AUD/USD: Trading the Australian jobs Mar 2014

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 has looked weak,  posting two consecutive declines,  falling well below  expectations on both occasions. The markets are expecting a strong turnaround, with an estimate of 15.3 thousand.  Will the indicator surprise the markets and beat the forecast?

Sentiment and Levels

The Australian dollar looked sharp last week, but has reversed directions and dropped below the  key 0.90 level.  The US posted strong  Nonfarm Payrolls  on Friday, much to the relief of the markets. Australian numbers have not impressed of late, and the RBA continues to  note its displeasure  about the high level of the Aussie. So, the overall sentiment is bearish on AUD/USD towards this release.

Technical levels from top to bottom: 0.9283, 0.9180, 0.91,  0.90, 0.8893 and  0.8747

5 Scenarios

1. Within expectations: 13.0K to 17.0K: 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: 17.1K to 20.0K: A strong reading could push the pair above one resistance level.
3. Well above expectations: Above 20.1K: A sharp rise in employment numbers could propel AUD/USD upwards, and  a second  resistance line could be broken.
4. Below expectations: 10.0K to 12.9K: A lower than expected reading could pull the pair downwards, with one support level at risk.
5. Well below expectations: Below 10.0K: A very poor reading will likely hurt confidence in the  Australian economy  and  AUD/USD could break  below  a second support level.

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

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