7 Nov 2013
Australian jobs next: Impact on the AUD/USD
FXstreet.com (Barcelona) - The market is looking for a slight improvement in today's Australian labour data for Q3.
According to Greg Gibbs, FX Strategist at RBS: "Australia has been showing a gradual weakening labour market for the last year with unemployment rising, labour growth weakening and participation slowing. We might expect this trend to continue. However, stability in job ads and stronger business surveys recently suggest it may begin to stabilise. We see risk greater of upbeat result."
Sean Callow, FX Strategist at Westpac, notes: "Sep saw a puzzling combination of a weak 9K jobs rise (after consecutive declines in Jul and Aug) but a surprising drop in unemployment to 5.6% as participation dropped to a low since 2006."
Callow, who reflects the view of Westpac Economists, adds: "In Oct Westpac looks for -10K on total employment, given weakness in jobs indexes in surveys but risks are to the stronger side of this. Consensus is a very familiar +10K. But we see a further slight fall in participation so our 5.7% unemployment forecast is in line with consensus."
Technically, the AUD/USD looks tentatively constructive, notes Valeria Bednarik, Chief Analyst at FXstreet.com: "The hourly chart shows price holding right above a slightly bullish 20 SMA, still far from giving selling signals. In the 4 hours chart a slightly positive tone prevails although a price acceleration below 0.9550 is required to confirm further gains."
If the data comes above expectations (with full-time job making up most of the growth), combined with a jobless rate reduction, the AUD spike may be in the order of 50/60 pips towards 0.9570/80 resistance, with stops reported around 0.9555/60, even breaking higher. In the same scenario, yet part-time makes up for most of the growth, rally might lack enough momentum to go on beyond 40/50 pips. Other positive scenario, yet not involving the combo of job change up/jobless rate down, may see the AUD/USD take off but rally likely fading once/if reported stops taken out.
On the flip side, a negative result, be it a combination of employment change down/jobless rate up, employment change down/jobless rate stable, with further analysis on full-time/part-time breakdown required to assess volatility potential, may see the AUD/USD return back and target the low edge of its old 0.9460/80-0.9520 box.
According to Greg Gibbs, FX Strategist at RBS: "Australia has been showing a gradual weakening labour market for the last year with unemployment rising, labour growth weakening and participation slowing. We might expect this trend to continue. However, stability in job ads and stronger business surveys recently suggest it may begin to stabilise. We see risk greater of upbeat result."
Sean Callow, FX Strategist at Westpac, notes: "Sep saw a puzzling combination of a weak 9K jobs rise (after consecutive declines in Jul and Aug) but a surprising drop in unemployment to 5.6% as participation dropped to a low since 2006."
Callow, who reflects the view of Westpac Economists, adds: "In Oct Westpac looks for -10K on total employment, given weakness in jobs indexes in surveys but risks are to the stronger side of this. Consensus is a very familiar +10K. But we see a further slight fall in participation so our 5.7% unemployment forecast is in line with consensus."
Technically, the AUD/USD looks tentatively constructive, notes Valeria Bednarik, Chief Analyst at FXstreet.com: "The hourly chart shows price holding right above a slightly bullish 20 SMA, still far from giving selling signals. In the 4 hours chart a slightly positive tone prevails although a price acceleration below 0.9550 is required to confirm further gains."
If the data comes above expectations (with full-time job making up most of the growth), combined with a jobless rate reduction, the AUD spike may be in the order of 50/60 pips towards 0.9570/80 resistance, with stops reported around 0.9555/60, even breaking higher. In the same scenario, yet part-time makes up for most of the growth, rally might lack enough momentum to go on beyond 40/50 pips. Other positive scenario, yet not involving the combo of job change up/jobless rate down, may see the AUD/USD take off but rally likely fading once/if reported stops taken out.
On the flip side, a negative result, be it a combination of employment change down/jobless rate up, employment change down/jobless rate stable, with further analysis on full-time/part-time breakdown required to assess volatility potential, may see the AUD/USD return back and target the low edge of its old 0.9460/80-0.9520 box.