- Australia Employment to Increase for Second Month; Jobless Rate to Hold at 5.8%
- Job Growth Exceeded Market Forecast in November, Led by Full-Time Employment (15.5K)
- Time of release: 01/16/20140:30 GMT, 19:30 EST
- Primary Pair Impact: AUD/USD
- Expected: 10.0K
- Previous: 21.0K
- DailyFX Forecast: -5.0K to 15.0K
- Need green, five-minute candle following the print to consider a long Australian dollar trade
- If market reaction favors a long trade, buy AUD/USD with two separate position
- Set stop at the near-by swing low/reasonable distance from entry; look for at least 1:1 risk-to-reward
- Move stop to entry on remaining position once initial target is hit, set reasonable limit
- Need red, five-minute candle to favor a short AUD/USD trade
- Implement same setup as the bullish Australian dollar trade, just in opposite direction
- Near-Term Correction Remains in Focus; Lower High in Place?
- RSI Threatening Bullish Trend; Break of Support to Highlight Downside Targets
- Interim Resistance: 0.9250 (23.6% retracement) to 0.9290 Pivot
- Interim Support: 0.8800 Pivot to 0.8810 (38.2% expansion)
Trading the News: Australia Employment Change
The AUD/USD may face a larger correction over the near-term as the Australian economy is expected to add another 10.0K jobs in December.
What’s Expected:
Why Is This Event Important:
Indeed, a further pickup in job growth may present the Reserve Bank of Australia (RBA) with a greater argument to move away from its easing cycle, and the AUD/USD may face a larger rebound should Governor Glenn Stevens talk down bets for another rate cut.
Expectations: Bullish Argument/Scenario
|
Release |
Expected |
Actual |
|
HIA New Home Sales (MoM) (NOV) |
-- |
7.5% |
|
Retail Sales (MoM) (NOV) |
0.4% |
0.7% |
|
Company Operating Profit (QoQ) (3Q) |
1.0% |
3.9% |
The ongoing expansion in private sector consumption may prompt firms to further expand their labor force, and a larger-than-expected rise in employment may encourage the RBA to soften its dovish rhetoric for monetary policy as growth prospects improve.
Risk: Bearish Argument/Scenario
|
Release |
Expected |
Actual |
|
ANZ Job Advertisements (MoM) (DEC) |
-- |
-0.7% |
|
AiG Performance of Services Index (DEC) |
-- |
45.1 |
|
AiG Performance of Manufacturing Index (DEC) |
-- |
47.6 |
However, the persistent slack in business outputs may drag on hiring, and a dismal jobs print may heighten bets for additional monetary support as the region continues to face an uneven recovery.
Bullish AUD Trade: Australia Adds 10.0K Jobs or More
Bearish AUD Trade: Job Growth Misses Market Expectations
Potential Price Targets For The Release
AUD/USD: Daily" title="AUD/USD: Daily" align="bottom" border="0" height="477" width="680">
Chart - Created Using FXCM Marketscope 2.0
Impact that the change in Australia Employment has had on AUD during the last month
|
Period |
Data Released |
Estimate |
Actual |
Pips Change (1 Hour post event ) |
Pips Change (End of Day post event) |
|
NOV 2013 |
12/11/2013 00:30 GMT |
10.0K |
21.0K |
-26 |
-118 |
Employment increased 21.0K in November following an unexpected 0.7% drop the month, while the jobless rate climbed to an annualized 5.8% from 5.7% as discouraged workers returned to the labor force. The market reaction was short-lived as the AUD/USD quickly pulled back from 0.9080, and the higher-yielding currency continued to lose ground throughout the day as the pair closed at 0.8935.
--- Written by David Song, Currency Analyst