7:30pm (NY Time) AU Employment Changes Forecast 5.3K Previous 24.5K
ACTION: AUD/USD BUY +40K SELL -25K
Our focus will be on the Australian Employment Changes release today as this news release is equivalent to US Nonfarm Payroll for Australia. This release is considered as a high impact report (and possibly trend changing) as the job’s market have a direct influence over the health of the economy, which in turn affects inflation, and inflation will affect future RBA monetary policy. If the actual release is better, it would be good for AUD and we would be looking to BUY AUD/USD, if the actual release is worse, it would be bad for AUD and we should be looking to SELL AUD/USD.
The safe deviation that we are looking for is at least of 30K. Historically a 25K~30K of difference has produced about 45 pips of movement in the direction of the difference about 75% of the time, which is more than enough for us to predict market reaction.
One other important news to pay attention to is the Unemployment Rate, which is expected at 5.9%. If we do not get a conflict with the Employment Changes, then we will proceed with the trading plan.
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.”
UPDATE: Came out better than expected but didn’t quite hit our tradable trigger… We took a trade based on this number but then the market failed to move with momentum. Eventually we closed the trade with a small loss… I guess market has this news priced in ahead.
Related posts:
- Australia Employment Changes 11/11/09
- Australia Employment Changes m/m 10/07/09
- Australia Employment Changes m/m 09/09/09
- How to trade Canadian Employment Change 04/09/10
- Trade Plan For Canada Employment Change 06/04/10
- Forex Trading Strategy For Canada Employment Change 07/09/10
- Canada Employment Changes 11/06/09
- Canada Employment Changes 01/08/10
- Canada Employment Change 02/05/10
- Forex Trade Plan & Video For Canada Employment Change 08/06/10
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stephen (1)
“..If we do not get a conflict with the Employment Changes.” – what is conflict deviation for Empl Ch.?
Jonie:
There is no deviation for conflict. If we have a better Employment and worse Unemployment rate, that in itself is a conflict. So we’ll go ahead and stay out of the market.