AUD/USD: Trading the Australian jobs Nov 2012

The Australian Employment Change indicator, released monthly, is an important leading indicator which often has a significant impact on the markets.  An  unexpected reading (higher or lower than the estimate) 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 12:30 GMT.

Indicator Background

Job creation is one of the most important leading indicators of overall economic activity. The releases of the Employment Change indicator and the  Unemployment Rate, which are  published at the same time, are highly anticipated by the markets.

Employment Change sparkled last month, adding 14.5 thousand new jobs. This easily beat the forecast of 5.1K. The markets are predicting a very modest gain in November, with an estimate of 0.2K.  Will the indicator  again surprise the markets and record a strong reading?

Sentiment and Levels

The aussie has gained about a cent this week, propelled  by the RBA’s surprise decision not to  cut its key interest rate. Most analysts had predicted a 0.25% rate cut, and the aussie has reacted positively to the RBA announcement. However,  the outcome of Tuesday’s US presidential election could have a major affect on the currency markets, and the  Australian dollar’s  rally could prove to be short-lived. So, the overall sentiment is  neutral on AUD/USD towards this release.

Technical levels from top to bottom: 1.0718, 1.06, 1.0508, 1.0402,  1.0326 and 1.0230.

5 Scenarios

1. Within expectations: -3.0K to 3.0K: 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: 3.1K to 6.0K: A strong reading could push the pair above one resistance level.
3. Well above expectations: Above 6.0K: A sharp rise in employment numbers could propel AUD/USD upwards, and two or more resistance lines could be broken.
4. Below expectations: -6.0 to -3.1K: A lower than expected reading could pull the pair downwards, with one support level at risk.
5. Well below expectations: Below -6.0K: In this scenario, AUD/USD could break two or more support levels.

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