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 00:30 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 slipped in December, posting a decline of -1.0 thousand. However, this was much better than the estimate of -11.0 thousand. The markets are expecting a strong turnaround in the January report, with a forecast of +12.9 thousand.
Sentiment and Levels
The RBA is maintaining a bias towards monetary easing, should inflation levels soften further. This contrasts with the situation in the US, where a March rate hike remains a possibility. This monetary divergence is weighing on the Australian dollar. A weaker Chinese economy and low oil prices will likely result in investors staying away from risky assets like the Aussie, in favor of the safe-haven dollar. So, the overall sentiment is bearish on AUD/USD towards this release.
Technical levels from top to bottom: 0.7440, 0.7284, 0.71, 0.70, 0.6899 and 0.6775
5 Scenarios
- Within expectations: 10.0K to 16.0K: In this scenario, AUD/USD could show some slight fluctuation, but it is likely to remain within range, without breaking any levels.
- Above expectations: 16.1K to 20.0K: A stronger reading than expected could push the pair above one resistance level.
- Well above expectations: Above 20.0K: In this scenario, AUD/USD could break above two or more resistance lines.
- Below expectations: 6.0 to 9.9K: A lower than expected reading could pull the pair downwards, with one support level at risk.
- Well below expectations: Below 6.0K: A weak gain will likely hurt confidence in the Australian economy, and AUD/USD could break below two or more support levels.
For more on the Aussie, see the AUD/USD.