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The Australian Employment Change is an important leading indicator which  may have a significant impact on the direction of AUD/USD. Traders and analysts carefully examine employment figures,  since strong employment numbers are critical for the growth of the economy.

Here are the details and 5 possible outcomes for AUD/USD.

Published on Thursday at 1:00 GMT.

Indicator Background

Job creation is one of the most important leading indicators of overall economic activity. The release of the Employment Change indicator, together with the unemployment rate, which is released at  the same time,  is highly anticipated by the markets. A reading that is  higher than forecast is bullish for the Australian dollar.

The Employment Change indicator had a terrible March, posting a job loss of 15.4K. This was nowhere near the market forecast of an increase of 5.1K. The markets are predicting a turnaround in April, with a forecast of 6.7K. Will the indicator climb back into positive territory this month?

Sentiment and Levels

AUD/USD continues to sag, as the  Australian dollar  has  given up over 1.5  cents against the US dollar since the  beginning of April.  Weaker global activity, and concern about the health of the Chinese economy, Australia’s number one trading partner, is weighing on the Australian dollar. If the US economy  continues to outshine the weak Australian economy, the greenback could continue to  make inroads  against the aussie. So, the sentiment  continues to be  bearish on AUD/USD towards this release.

Technical levels from top to bottom: 1.0402, 1.0372, 1.0320, 1.0250, 1.02, 1.0080 and 1.00.

5 Scenarios

  1. Within expectations: 2.0K to 12.0K: 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: 12.1K to 17.0K: A reading above expectations would be an indication  of expansion in the economy,  and could  push the pair  above one  resistance level.
  3. Well above expectations: Above 17.0K: A sharp rise in employment  numbers could propel the Aussie upwards, and two or more levels of resistance  could be broken.
  4. Below expectations: -3K to 1.9K: A reading close to zero or in negative territory could pull the pair downwards, with one support level at risk.
  5. Well below expectations: Below -3.1K: Another poor reading will hurt confidence in the Australian dollar, and AUD/USD could break two  or more support levels.

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