December month employment statistics from the Australian Bureau of Statistics, up for publishing at 00:30 GMT on Thursday, will be the immediate catalyst for the AUD/USD pair traders.
The jobs figures become less important considering the Omicron impact to be seen in January. However, the Reserve Bank of Australia’s (RBA) hawkish bias and the recently in-trend inflation fears keep the employment data on the first-tier catalysts’ list of AUD/USD traders.
Market consensus favors Employment Change to ease to 30K from +366.1K previous on a seasonally adjusted basis whereas the Unemployment Rate is likely to drop to 4.5% from 4.6%. Further, the Participation Rate may also rise from 66.2% to 66.1%.
Ahead of the event, analysts at Westpac said,
The ABS’s unadjusted payrolls data points towards solid gains in employment for the month (Westpac f/c 30k, market 60k), with any negative impact from Omicron to be seen in the January data instead. Westpac looks for the rising participation rate to slow the fall in the unemployment rate, keeping it at 4.6% versus a consensus of 4.5%.
How could the data affect AUD/USD?
AUD/USD remains on the back foot around 0.7220, consolidating the week’s first daily gains, ahead of the key event. The pair’s latest losses could be linked to the risk-off mood triggered by US President Joe Biden’s comments, as well as cautious sentiment ahead of the key data.
Given the December jobs report likely preceding the Omicron spread in Australia, today’s jobs report may have a little impact on the AUD/USD, unless being a total disappointment. However, a strong reading may help the Aussie pair to recover some of the latest losses.
Technically, AUD/USD drops towards the 200-SMA and the stated support line, respectively near 0.7190 and 0.7180, amid sluggish MACD and RSI retreat. It’s worth noting, however, that a clear downside break of the 0.7180 will drag AUD/USD towards the monthly low of 0.7129 and August 2021 trough surrounding 0.7105.
Meanwhile, the monthly horizontal resistance near 0.7180 acts as an extra hurdle to the north even if the AUD/USD prices manage to cross the immediate 100-SMA resistance surrounding 0.7225.
Key Notes
AUD/USD retreats towards 0.7200 ahead of Aussie employment, PBOC
Australian Employment Preview: Aussie unlikely to benefit from a strong jobs report
About the Employment Change
The Employment Change released by the Australian Bureau of Statistics is a measure of the change in the number of employed people in Australia. Generally speaking, a rise in this indicator has positive implications for consumer spending which stimulates economic growth. Therefore, a high reading is seen as positive (or bullish) for the AUD, while a low reading is seen as negative (or bearish).
About the Unemployment Rate
The Unemployment Rate released by the Australian Bureau of Statistics is the number of unemployed workers divided by the total civilian labor force. If the rate hikes, indicates a lack of expansion within the Australian labor market. As a result, a rise leads to weaken the Australian economy. A decrease of the figure is seen as positive (or bullish) for the AUD, while an increase is seen as negative (or bearish).
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