AUD/USD: Trading the Australian jobs Sep 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 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 looked weak last month, coming in at -0.3 thousand. This was the indicator’s second decline in three months, pointing to weakness in the Australian labor market. The markets are expecting much better news this time around, with the August estimate standing at 15.2 thousand. Will the indicator follow suit with a strong rebound?

Sentiment and Levels

The US dollar  continues to steam roll over its major rivals, and has posted strong gains against the Aussie this week. The US economy continues to move in the right direction, and speculation about the timing of an interest rate could give a further boost to the US dollar. So, the overall sentiment is bearish on AUD/USD towards this release.

Technical levels from top to bottom: 0.9270, 0.9235, 0.9170, 0.90 and 0.8891.

5 Scenarios

1. Within expectations: 13.0K to 15.0K: 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: 15.1K to 18.0K: A strong reading could push the pair above one resistance level.
3. Well above expectations: Above 18.0K: A sharp rise in employment numbers could propel AUD/USD past a second resistance line.
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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