AUD/USD: Trading the Australian jobs Jun 2012

The  Australian  Employment Change indicator, released monthly,  is an important leading indicator which often has a significant impact on the markets. Traders and analysts carefully examine employment figures, looking for any trends which could affect the movement of  AUD/USD.  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. The releases of the Employment Change indicator, together with the Unemployment Rate,  are highly anticipated by the markets.  

After a strong reading of 15.5 thousand newly employed people in May, the June  estimate stands at a flat 0.9K. The Unemployment Rate dipped to 4.9% in May, but the markets are forecasting a rise to 5.1% this month. If either of these employment indicators fall below the market forecast, the aussie could lose some ground.

Sentiment and Levels

The Australian dollar had a terrible May, and June may not prove to be a whole lot better. With the ongoing crisis in the Euro-zone, investors will likely continue to favor safe haven currencies, such as the greenback. As well, weak global demand, particularly in China, is putting a dent in Australian exports and weighing on the aussie. So, the overall sentiment is  bearish on AUD/USD towards this release.

Technical levels from top to bottom: 0.9917, 0.9860, 0.9780,  0.9668, 0.9541 and 0.9405.

5 Scenarios

1. Within expectations:  -2.0K to 4.0K: 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:  4.1K to 7.0K: A strong reading could  push the pair  above one  resistance level.
3. Well above expectations: Above 7.0K: A sharp rise in employment  numbers could propel  AUD/USD upwards, and two or more resistance  lines can be broken.
4. Below expectations: -2.1K to -5.0K: A lower than expected reading could pull the pair downwards, with one support level at risk.
5. Well below expectations: Below -5.0K: A very  poor reading will hurt confidence in the  aussie and AUD/USD could break two  or more support levels.

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