Australian Employment Change, released monthly, is an important leading indicator which often has a significant impact on the markets. Employment figures are important as they provide a snapshot of the health of the economy. 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, Employment Change should be treated as a market-mover which can affect the movement of AUD/USD.
Employment Change looked abysmal in July, posting a drop of -10.2 thousand. This shocked the markets, which had anticipated an gain of 6.2 thousand. The markets are expecting a strong turnaround for the August reading, with an estimate of 10.2 thousand. Will the indicator follow suit and beat the rosy prediction?
Sentiment and Levels
The Australian dollar has looked very sharp in September, and continues to make gains against the US dollar. The RBA has clearly indicated that it wants a weaker Australian dollar to help the economy, and will not be pleased with this recent spike. At the same time, Opposition Leader Tony Abbott handily won Saturday’s election, and his pro-business stance could give a lift to the Aussie. Over in the US, the Federal Reserve could taper QE as early as September and continuing market speculation about this has been bullish for the US dollar. So, the overall sentiment is neutral on AUD/USD towards this release.
Technical levels from top to bottom: 0.9670, 0.9556, 0.9428, 0.9283, 0.9180 and 0.9041.
5 Scenarios
- Within expectations: 7.0K to 13.0K: In this scenario, AUD/USD could show some slight fluctuation, but it is likely to remain within range, without breaking any levels.
- Above expectations: 13.1K to 17.0K: A strong reading could push the pair above one resistance level.
- Well above expectations: Above 17.0K: A sharp rise in employment numbers could propel AUD/USD upwards, and two resistance lines could be broken.
- Below expectations: 3.0K to 6.9K: A lower than expected reading could pull the pair downwards, with one support level at risk.
- Well below expectations: Below 3.0K: A very poor reading could hurt confidence in the Aussie, and AUD/USD could break two support levels.
For more on the Aussie, see the AUD/USD.
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