April month employment statistics from the Australian Bureau of Statistics, up for publishing at 01:30 GMT on Thursday, will be the immediate catalyst for the AUD/USD pair traders.
The jobs figures have been important considering the Reserve Bank of Australia’s (RBA) hawkish stand, backed by firmer inflation data, as well as a bit softer Wage Price Index for Q1 2022.
Market consensus suggests that the headline Unemployment Rate may ease to 3.9% from 4.0% on a seasonally adjusted basis whereas Employment Change could rise from 17.9K to 30K. Further, the Participation Rate may remain unchanged at 66.4% during the stated month.
Ahead of the event, analysts at Westpac said,
Given that weekly payrolls suggest weather and holiday events dampened jobs growth in April, Westpac anticipates employment to have risen 20k (median 30k), after 18k in March. The participation rate holding flat at 66.4% should see unemployment rate tick down from 4.0% to 3.9% (consensus 3.9%). This would be the lowest rate in the monthly series which began in 1978.
ANZ also mentioned,
We expect the unemployment rate to have fallen to 3.8% in April (from 4.0% in March) on an employment gain of 30k. Last April, due to Easter being early and during the survey period, there was an exaggerated seasonal effect which saw employment drop against expectations. But given Easter started at the end of the survey period this year, it should have less of an effect. At 3.8%, the unemployment rate would be the lowest since 1974.
How could the data affect AUD/USD?
AUD/USD bear take a breather around 0.6970, printing mild gains after dropping the most in a week the previous day, as traders anticipate a record low Unemployment Rate to propel the RBA’s rate hike trajectory. However, challenges to sentiment and cautious mood, as well as disappointment from the softer Aussie Wage Price Index for Q1 2022, seem to weigh on the pair prices of late.
That said, the downbeat prints of the Wage Price Index join economic fears for the largest customer China to stop RBA from faster/heavier rate hikes, which in turn can join the risk-aversion wave to keep AUD/USD sellers hopeful. However, firmer jobs report can offer knee-jerk buying.
Technically, a confluence of the 100-HMA and a weekly rising trend line, around 0.6960, restricts immediate downside ahead of the 0.6900 threshold and the monthly low near 0.6830. Recovery remains, on the contrary, remain elusive until the AUD/USD prices cross a two-week-long horizontal resistance area near 0.7040-60.
Key Notes
Australian Employment Preview: Could strong figures aid the aussie?
AUD/USD Price Analysis: Bears jostle with 100-SMA, weekly support below 0.7000
AUD/USD braces for Australia employment data below 0.7000, risk-aversion in play
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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