Australia Employment Change is similar to U.S. NFP (Nonfarm Payroll) and Canada Employment Change, this is an economic indicator for the Employment Changes in Australia, here’s the forecast:
9:30pm (NY Time) AU Employment Change Forecast 20K Previous 45.9K
AU Unemployment Rate Forecast 5.1% Previous 5.1%
ACTION: AUD/USD BUY 50K SELL -10K
The Trade Plan
The safe deviation that we are looking for is at least of 30K. 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 steady at 5.1%. If we do not get a conflict with the Employment Changes, 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 50K of release, our bias will be to BUY AUD/USD; if we get a -10K of release, our bias will be to SELL AUD/USD. We’ll only enter after we see a decent retracement from the initial spike.
The Market
Australian Employment Change release is considered as a high impact report as the job’s market has direct influences over the entire economy, which in turn affects inflation, and inflation will affect future RBA monetary policy. With RBA on a pause for further monetary tightening policy, if this release also surprise to the downside, it would push AUD beyond current support (0.9000) and we would be looking to SELL AUD/USD as the market is focusing on the recent risk aversion sentiment resulted from the US FOMC statement; however, if the release is better, we should be looking for another push on the AUD/USD back above the 0.9100
Additional Thoughts
With AUD/USD reaching above the 0.9200 at a psychological top and with the FOMC statement sending out a bearish message over US’s economic outlook, which in term drove up demand for safe-haven currencies (USD & JPY), AUD/USD is finally looking good for a drop as traders rebalance their portfolio to adjust market sentiment. I believe the next support for the AUD/USD is the 0.8900 area, with .08600 being the next target.
Pre-news Considerations
AUD/USD should be under pressure from the recent FOMC statement is casting doubt over global economic recovery. It is likely we’ll see some selling pressure on this pair, but not from the pre-news as Employment has been a strong area for the booming economy. I would be looking for a possible short-term bounce on account of pre-news, but I am still looking for long-term shorts for this pair and a bounce back could offer opportunities for a SELL.
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.”
Related posts:
- Trade Plan For Canada Employment Change 06/04/10
- Forex Trade Plan & Video For Canada Employment Change 08/06/10
- How to trade Canadian Employment Change 04/09/10
- Australia Employment Changes 12/09/09
- Forex News Trading Plan For CA Employment Change 10/08/10
- Australia Employment Changes 11/11/09
- Canada Employment Change 03/12/2010
- US NFP (Nonfarm Payroll) Employment Analysis & Trade Plan 09/03/10
- Forex News Trading Canada Employment Change 11/05/10
- Forex News Trading Canada Employment Change 01/07/11
