AUD/USD: Trading the Australian jobs Dec 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 posted an  excellent gain of 24.3 thousand in the  October release,  beating  the estimate of 20.3 thousand.  The estimate for the  November reading is not as strong, with an estimate of  15.2 thousand. Will the indicator again surprise the markets and beat the forecast?

Sentiment and Levels

US employment numbers were back on track last week,  thanks to  an excellent jobs report and some wage inflation as well. This should help ease concerns about whether the Fed remains on track for a rate hike in the first half of 2014. Australian numbers remains weak, which is weighing on the wobbly Australian dollar.  So, the overall sentiment is bearish on AUD/USD towards this release.

Technical levels from top to bottom: 0.8550, 0.8456, 0.8316, 0.8150,  0.8013 and 0.7978.

5 Scenarios

1. Within expectations: 12.0K to 18.0K: 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: 18.1K to 22.0K: A strong reading could push the pair above one resistance level.
3. Well above expectations: Above 22.0K: A sharp rise in employment numbers could propel AUD/USD upwards and two or more resistance lines could be broken.
4. Below expectations: 8.0K to 11.9K: A lower than expected reading could pull the pair downwards, with one support level at risk.
5. Well below expectations: Below 8.0K: In this scenario, AUD/USD could break two or more support levels.

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

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