Australian Employment Change, which is released monthly, provides a snapshot of the health of the Australian labor 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 is a market-mover which can affect the movement of AUD/USD.
Employment Change disappointed in April, posting a decline of 2.9 thousand. This was well off the estimate of +4.5 thousand, and marked a 3-month low. The markets are expecting a sharp turnaround in the May report, with the estimate standing at 15.2 thousand. Will the indicator match or beat this rosy prediction?
Sentiment and Levels
The struggling Aussie managed to hold its own last week against the greenback, but US numbers are improving and the Fed is expected to give the green light to a rate hike in September. These factors will continue to put pressure on the Australian currency. So, the overall sentiment is bearish on AUD/USD towards this release.
Technical levels from top to bottom: 0.7901, 0.7798, 0.7692, 0.7601, 0.7528 and 0.7403.
5 Scenarios
- Within expectations: 12.0K to 18.0K: In this scenario, AUD/USD could show some slight fluctuation, but it is likely to remain within range, without breaking any levels.
- Above expectations: 18.1K to 22.0K: A strong reading could push the pair above one resistance level.
- Well above expectations: Above 22.0K: A sharp rise in employment numbers could propel AUD/USD upwards, and two or more resistance lines could be broken.
- Below expectations: 8.0K to 11.9K: A lower than expected reading could pull the pair downwards, with one support level at risk.
- Well below expectations: Below 7.9K: A very poor reading will likely hurt confidence in the Australian economy, and AUD/USD could break two or more support levels.
For more on the Aussie, see the AUD/USD.
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