AUD/USD: Trading the Australian jobs Aug 2014

Australian Employment Change, which is released monthly, provides a snapshot of the health of the Australian employment 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 can have a major impact on the movement of AUD/USD.

Employment Change bounced back last month with a strong gain of 15.9 thousand, well above the estimate of 12.3 thousand. Another strong gain is expected, with the estimate standing at 12.3 thousand. Will the indicator repeat and beat the forecast?

Sentiment and Levels

The Australian dollar had enjoyed an uneventful summer, but was swept lower last week by the broadly-stronger US dollar. The Australian economy remains fragile, with the export-driven economy struggling with the ongoing global slowdown. So, we could see the greenback’s rally continue this week. Thus, the overall sentiment remains bearish on AUD/USD towards this release.

Technical levels from top to bottom: 0.97, 0.9526, 0.9441, 0.9369, 0.9279 and 0.9175.

5 Scenarios

1. Within expectations: 10.0K to 14.0K: 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: 14.1K to 17.0K: A strong reading could push the pair above one resistance level.
3. Well above expectations: Above 17.0K: A sharp rise in employment numbers could propel AUD/USD upwards, and a second resistance line could be broken.
4. Below expectations: 7.0K to 9.9K: A lower than expected reading could pull the pair downwards, with one support level at risk.
5. Well below expectations: Below 7.0K: A very poor reading could result in AUD/USD breaking below a second support level.

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

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