The Australian Employment Change release should provide an opportunity to trade the Aussie especially if we were to get our tradable figures. With the overall liquidity running thin, I would only recommend a trade if we get our tradable releases, or it’s probably best to stay out of the market.
7:30 pm (NY Time) AU Employment Change Forecast 19.2K Previous 3.7K
7:30 pm (NY Time) AU Unemployment Rate Forecast 5.4% Previous 5.4%
DEVIATION: 25K (BUY AUD at +44.2K / SELL AUD at -5.8K)
The Trade Plan
The deviation that we are looking for is at least of 25K. Historically a 25K~30K of difference has produced about 40~50 pips of movement in the direction of the difference about 75% of the time. Expect to see the effect of this news to last minimum 45 minutes to 2 hours; typical news effect should last under 2 hours. One other important news to pay attention to is the Unemployment Rate, which is expected to remain at 5.4%. If we don´t get a conflict with the Employment Change, then we will proceed with the trading plan.
We´ll look to trade this using after news retracement trading method, we´ll wait for the market to retrace and stay out of the market during the release time. If we get a +44.2 of release, our bias will be to BUY AUD against other currencies; if we get a -5.8K of release, our bias will be to SELL AUD against stronger currencies. We´ll only enter after we see a decent retracement from the initial spike and if we get those release numbers…
For more information on my trading methods: http://www.currencynewstrading.com/how-to-get-started-with-news-trading/
I’d recommend to use the Recommended Pairs from above as they are based on my CSM, which should provide the best combination of currency pairs to trade based on better/worse news… of course, you can also trade the default pair: AUD/USD.
Outlook Score
Outlook score is derived from market sentiment, focus, and economic indicators for the currency. It represents the long-term trend of the currency and its market perception. In short, a strong Outlook Score means more long-term demand for the currency, and a weak Outlook Score is the opposite.
DEFINITION
“Measures the change in number of employed people during the previous month. A rising trend has a positive effect on the nation´s currency. Job creation is an important indicator of economic health because consumer spending, which is highly correlated with labor conditions, makes up a large portion of GDP.”