AUD/USD Between a Rock and a Hard Place Ahead of Employment Data

As with any employment change data, the price move once it released is always a crap shoot.


Australian employment data for December is due out in a few hours and expectations for the Employment Change are +16,000 vs a surprising +39,000 in November.  The headline number is a bit deceiving though, as it is a combination of full-time jobs and part-time jobs.  Of the 39,000 jobs created in November, only 4,200 were full-time.  35,700 of those jobs were part-time.  This month, expectations for the full-time employment change is -8,000 while the part-time employment change expectations are for +24,000.  The unemployment rate is expected to remain unchanged at 5.2%.

As with any economic data, the price move once it released is always a crap shoot.  Typically, on better than expected data price moves higher, and on worse than expected data price moves lower.  With the Australian Employment Change, it’s even more difficult to decipher because of full-time job and part-time jobs.   Add to that any possible delays in hiring because of the wildfires, and December’s data may be even more difficult to surmise. 

Now the fun part…add in a chart of the AUD/USD:

Source: Tradingview, City Index

On December 10th, AUD/USD broke higher out of the downward sloping channel dating back to mid-2018.  Since then, price action has done the following:

  • Tested and failed to breakout above the psychological round number of .7000 and has since pulled back
  • Formed a Head and Shoulders formation
  • Broke the neckline of the Head and Shoulders Pattern, although price is currently trading right below it
  • Pulled all the way back to the upper long-term channel trendline and is currently testing it near .6843
  • Has put in higher highs and higher lows since the lows on October 1st, and is currently testing the upward sloping trendline, again at .6843
  • Formed a Doji candle on today’s daily time-frame, which is considered indecision

On a 240-minute chart, AUD/USD is also:

  • Hovering near the 50% retracement from the October 1st low to the December 31st high
  • Sitting on horizontal support
  • Diverging with the RSI, indicating a possible reversal may be coming soon

Source: Tradingview, City Index

In summary, with the full and part time aspect of the employment change, the wildfires,  and all the technical aspects of AUD/USD converging at or near current levels,  traders will be extra careful when trading the data.  They made even sit aside until they can determine more of a directional bias.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.