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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 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 was outstanding in November, posting a gain 42.7 thousand crushing the estimate of 15.2 thousand.  The estimate for the  December reading is a modest 5.3 thousand. Will the indicator again surprise the markets and beat the forecast?

Sentiment and Levels

The Australian dollar enjoyed  strong gains last week, but this could be a temporary reprieve as  the  US economy continues to  outperform that of Australia. As well, the RBA  wants to see the Australian trade closer  to the  US 75 cents level.  The US economy continues to look solid and recent employment numbers have been strong. So, the overall sentiment is bearish on AUD/USD towards this release.

Technical levels from top to bottom: 0.8550, 0.8466, 0.8312, 0.8150,  0.8013 and 0.7978.

5 Scenarios

  1. Within expectations: 2.0K to 8.0K: 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: 8.1K to 12.0K: A strong reading could push the pair above one resistance level.
  3. Well above expectations: Above 13.0K: A sharp rise in employment numbers could propel AUD/USD upwards, and two or more resistance lines could be broken.
  4. Below expectations: -2.0K to 1.9K: 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 two or more support levels.

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

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