Later in the session, the Australian Bureau of Statistics will release employment change figures for the month of November. The figure will carry with it significant weight as traders are already looking ahead to next February’s RBA meeting. As a result, the event carries with it three significant scenarios to consider.
An Increase in Positions
Should the ABS report rise at or above current estimates of 200 positions, it would be the fourth month in the last five where the Australian economy has added jobs. This is considerably bullish when taking into consideration that RBA estimates factored in a near term weakening of the labor market, supported by forecasts that were downgraded by central bankers last month. The RBA now predicts the 13th largest economy in the world to churn at a 2.50% pace of growth in 2013, compared to 3% expected earlier on. Ultimately, a positive figure would crimp expectations that central bankers are done with their easing cycle, likely delaying any further stimulus towards later in the year.
A bullish signal of this magnitude could allow the AUDUSD to break through key resistance at 1.0500-1.0525. Subsequently, an upside violation would prompt an advance to subsequent resistance at 1.0624 (September 14th session high).
No Change in Positions
With no changes in the month of November, traders will likely turn to the upcoming AIG Construction index in gaining in depth color into the country’s labor market. And, given that this is widely factored in, a print of no additions or deletions in the Australian labor market would likely have little effect on the underlying AUDUSD currency pair.
A Decrease in Positions
However, should the survey be reflective of a contraction in the country’s labor market, it would reinforce the idea that the Reserve Bank of Australia will need to continue to ease in order to support economic growth. The notion would be further bolstered by a rise in the national unemployment rate, which is estimated to go from 5.4% to 5.5%. This is a far cry from the 4.9% witnessed in April and would do nothing but hurt the AUDUSD.
A negative piece of employment data would help to reinforce the 1.0500-1.0525 resistance barrier allowing for the currency pair to fail and subsequently decline towards initial support at the 1.0286 November 16th session low. Technical oscillators are overwhelmingly in favor of the decline, remaining in overbought territory.
Source: FXTrek Intellicharts