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 sharp in July, with an excellent gain of 38.5 thousand, crushing the estimate of 10.2 thousand. A much smaller gain of 5.2 thousand is expected in the August report. Will the indicator again surprise the markets and beat the forecast?
Sentiment and Levels
The Chinese slowdown continues to weigh on the Australian dollar, as Australia is heavily dependent on the Asian giant. In the US, mixed data continues to make it difficult to anticipate what the Federal Reserve will do regarding a rate hike. Will the Fed press the rate trigger? In our opinion, there is a good chance of a “dovish rate hike”, and such a move would likely propel the US dollar to greater heights. So, the overall sentiment is bearish on AUD/USD towards this release.
Technical levels from top to bottom: 0.7346, 0.7266, 0.7113, 0.7011, 0.6931 and 0.6843.
5 Scenarios
- Within expectations: 1.0K to 9.0K: In this scenario, AUD/USD could show some slight fluctuation, but it is likely to remain within range, without breaking any levels.
- Above expectations: 9.1K to 13.0K: A strong reading could push the pair above one resistance level.
- 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.
- Below expectations: -3.0K to 0.9K: A reading close to zero or in negative territory could pull the pair downwards, with one support level at risk.
- 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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