The Australian Bureau of Statistics (ABS) has published an overview of trends in the Australian labour market, with the Unemployment Rate a closely watched indicator. However, the miss in the headline is shocking and will hurt the Aussie for the day(s) ahead.
The data has arrived as follows:
- Australian Employment Change July: -40.9K (est 25.0K; prev 88.4K).
- Unemployment Rate July: 3.4% (est 3.5%; prev 3.5%). This is a slight positive in an otherwise poor outcome.
- Participation Rate July: 66.4% (est 66.8%; prev 66.8%). This could be a lifeline to the Aussie bulls.
AUD/USD is being pressured heavily by the dismal results in the data, losing some 20 pips on the knee jerk to test 0.6925. The market is now pricing in an 80% chance RBA will cut 25bpss in September.
The hourly chart is pressured below the resistance and on the lower time frames, there is a bearish bias as follows:
The 5-min chart is correcting the initial knee-jerk but should the bulls fail to break above the counter trendline resistance, then the most probable scenario is a downside extension below support for the session ahead.
About the jobs data
It is released about 15 days after the month's end and throws light on the overall economic conditions, as it is highly correlated to consumer spending and inflation. Despite the lagging nature of the indicator, it affects the Reserve Bank of Australia’s (RBA) interest rate decisions, in turn, moving the Australian dollar. The upbeat figure tends to be AUD positive.
The Unemployment Rate released by the Australian Bureau of Statistics is the number of unemployed workers divided by the total civilian labour force. If the rate hikes indicate a lack of expansion within the Australian labour market. As a result, a rise leads to a weakening of the Australian economy. A decrease in the figure is seen as positive (or bullish) for the AUD, while an increase is seen as negative (or bearish).
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