AUD/USD: Trading the Australian jobs Nov 2015

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.

Update:  Australia enjoys jobs gain of 24.1K – AUD/USD rises from the abyss

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 looked awful in September,  with a reading of  -29.7 thousand.  This surprised the markets, which had stood at 17.6 thousand. The markets are expecting a strong turnaround, with a forecast of 10.3 thousand.

Sentiment and Levels

The US dollar has benefited from a US economy which continues to expand at an impressive clip,  led by  a strong GDP and excellent consumer confidence numbers.  With the Fed giving the economy a thumbs up and concluding QE last week, the next move is a rate hike in 2015. Down Under, the RBA made no move with interest rates, and  this week’s key numbers  will  have to be strong if the Aussie hopes to hold its own against the US dollar.  So, the overall sentiment is bearish on AUD/USD towards this release.

Technical levels from top to bottom: 0.9185, 0.90, 0.8891, 0.8750,  0.8660 and 0.8550.

5 Scenarios

1. Within expectations: 7.0K 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 19.0K: A strong reading could push the pair above one resistance level.
3. Well above expectations: Above 19.0K: A sharp rise in employment numbers could propel AUD/USD upwards, and two or more resistance lines could be broken.
4. Below expectations: 3.0K to 6.9K: A lower than expected reading could pull the pair downwards, with one support level at risk.
5. Well below expectations: Below 3.0K: 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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