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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 18.1 thousand in the  March  release,  well above  the estimate of 7.3 thousand.  The estimate for the  April reading is not as strong, with an estimate of  7.5 thousand. Will the indicator again surprise the markets and beat the forecast?

Sentiment and Levels

In the US,  there was positive  news on the  employment front late last week, with an excellent  Nonfarm Payrolls and a drop in the Unemployment Rate. So,  market sentiment towards the US dollar should be positive.  The  Aussie gained  sharply after the RBA held interest rates, but the  RBA head Glenn Stevens reiterated that the Aussie is overvalued, and these sentiments  could weigh on the currency.  So, the overall sentiment is bearish on AUD/USD towards this release.

Technical levels from top to bottom: 0.9442, 0.94, 0.9368, 0.9283,  0.9180 and 0.90.

5 Scenarios

  1. Within expectations: 4.0K to 11.0K: 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: 11.1K to 14.0K: A strong reading could push the pair above one resistance level.
  3. Well above expectations: Above 14.1K: 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 3.9K: 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 below a second  support level.

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

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