The Australian employment change is an important leading indicator which often has a significant impact on the markets. Traders and analysts carefully examine employment figures in trying to determine consumer spending and the health of the economy. If the Employment Change figure is better than forecast, this 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. The publication of the monthly Employment Change indicator, which is released simultaneously with the Unemployment Rate, is highly anticipated by the markets.
The Employment Change indicator has been in extreme flux over the past several months. The August and September readings were well below the forecasts. There was a sharp reversal of this downward trend in October, with a reading of 20.4K, which easily surpassed the forecast of 10.1K. The forecast for November is set at 10.3K. Will the indicator again exceed the forecast and surprise the markets?
Sentiment and Levels
The Australian dollar has lost ground over the past week, wiping out its previous gains. The Central Bank lowered interest rates due to easing inflation and the global slowdown. This made the Aussie less attractive to investors and pushed down AUD/USD. In addition, indicators of consumer confidence and the construction sector remain weak. So, the overall sentiment is bearish on AUD/USD towards this release.
Technical levels from top to bottom: 1.0764, 1.06, 1.0480, 1.04, 1.0314, 1.0254 and 1.02.
5 Scenarios
- Within expectations: 5K to 15K: In this scenario, AUD/USD could show some slight fluctuation, but it is likely to remain within range, without breaking any levels.
- Above expectations: 16K to 21K: A stronger reading than anticipated would be an indication of expansion in the economy, and could push the pair above one resistance level.
- Well above expectations: Above 21K: A sharp rise in employment numbers could propel the Aussie upwards, and two levels of resistance or more can be broken.
- Below expectations: -1K to 4K: A poor reading could pull the pair downwards, with one support level at risk.
- Well below expectations: Below -1K: A reading in negative territory will have an adverse impact on the Australian dollar, and AUD/USD could shatter two or more support levels.
For more on the Aussie, see the AUD/USD.