May 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.

Market consensus suggests that the headline Unemployment Rate may ease to 3.8% from 3.9% on a seasonally adjusted basis whereas Employment Change could rise to 25K from 4K. Further, the Participation Rate may also improve to 66.4% from 66.3% previous readings.

In addition to the Aussie jobs report, the quarterly release of the Reserve Bank of Australia (RBA) Bulletin will also be important for the AUD/USD traders considering the recently mixed data and the central bank’s hawkish bias.

Ahead of the event, analysts at Westpac said,

Despite the robust demand for labor as evinced by job vacancies, weekly payrolls remain weak; Westpac therefore anticipates employment to lift by 5k in May (vs. consensus +25k) with a clear risk of a negative print. A very small decline in participation should see the unemployment rate round down to 3.8%. MI inflation expectations should continue to hold at an elevated level in June.

TD Securities said,

A strong May labour market print may concern the RBA further on the wages front, with accelerating wages growth complicating their fight to bring inflation back to target. Thus, we expect the RBA to hike again by 50bps in July due to the risks to wages growth from the minimum wage decision and a very tight labour market.

How could the data affect AUD/USD?

AUD/USD extends the post-Fed gains, the biggest in six weeks, towards the weekly top surrounding 0.7050 ahead of the Aussie employment report for May. The risk barometer pair’s latest gains could be linked to the market’s upbeat mood due to the sustained downturn in yields and the US dollar.

That said, the recently mixed Aussie data challenges the RBA to move forward on its hawkish path. However, the Fed’s latest 75 bp moves allow the AUD/USD bulls to remain hopeful should the scheduled jobs report print upbeat figures.

Considering this, FXStreet’s Valeria Bednarik says

A scenario of solid job creation alongside expectations for rising inflation would surely be a boost for the Aussie, moreover after the dust settles post-Fed. However, if employment figures disappoint and inflation pressures ease, the Aussie could suffer a major setback.

Technically, AUD/USD battles with short-term resistance confluence surrounding 0.7030-35, comprising the multiple levels marked since early May. Given the recently positive oscillators, the buyers are likely to cross the immediate hurdle and brace for the 0.7100 mark, provided the scheduled data support the bulls. On the contrary, a downside break of January’s low near 0.6965 could be enough to recall the bears.

Key Notes

Australian Employment Preview: Job creation could pick up, but what about inflation?

AUD/USD defends post-Fed gains around 0.7000 with eyes on Australia Employment

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).

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content

Recommended content

Editors’ Picks

EUR/USD falls toward 0.9600 amid renewed dollar strength

EUR/USD falls toward 0.9600 amid renewed dollar strength

EUR/USD has turned south and declined toward 0.9600 in the second half of the day on Monday. A sharp decline witnessed in the GBP/USD pair and the souring market mood provided a boost to the dollar, lifting the US Dollar Index back above 114.00. 


GBP/USD falls below 1.0700 following BoE statement

GBP/USD falls below 1.0700 following BoE statement

GBP/USD came under renewed bearish pressure and slumped below 1.0700 during the American trading hours. In a statement published on Monday, the Bank of England said that they welcome the government's commitment to sustainable economic growth, triggering another GBP selloff.


Gold could soon challenge the $1,600 level

Gold could soon challenge the $1,600 level

Demand for the dollar continued at the beginning of the week, resulting in XAUUSD plummeting to $1,626.67, its lowest since April 2020. Concerns about potential recessions undermined the dismal market’s mood, pushing the greenback higher despite its extreme overbought conditions.

Gold News

Bitcoin: Investors need to prepare for volatile breakout

Bitcoin: Investors need to prepare for volatile breakout

Bitcoin price has been devoid of volatility for the last week and has been in a tight consolidation without directional bias whatsoever. This range bound move has formed a triangle pattern which could break either way. 

Read more

Three stocks that will be in the news this week: Amazon, Nike, Micron Technology

Three stocks that will be in the news this week: Amazon, Nike, Micron Technology

The S&P 500 index lost 4.1% last week and left traders melancholy with another week to go in this dreadful September. The S&P 500 index is down 6.6% so far in the month that is already known for poor performance, and most seem to think the pain will continue. 

Read more