Forex Trading Guide: Australia’s Jobs Report

Planning on trading the release of Australia’s employment report? Check out these tips and tricks based on past price action!

What is this report all about?

Australia’s employment change figure shows the change in the number of people who have jobs during the month prior to the release. In other words, this report keeps track of whether jobs were created or lost in that period.

As such, the employment report is considered a leading indicator for spending and overall growth. After all, job creation usually leads to higher consumer spending, which comprises as huge chunk of economic activity.

What is expected for the upcoming release?

For April, Australia is expected to have added 7.5K jobs, a much slower pace of increase compared to March’s 18.1K reading and February’s 47.3K figure. Number crunchers estimated that this could push the jobless rate from 5.8% up to 5.9% for the month.

A lower than expected reading might be very bearish for the Australian dollar, as it could indicate that the economy has hit a soft patch when it comes to hiring. On the other hand, a huge upside surprise could give the Aussie a strong boost. Revisions in previous reports could also have an impact on the Aussie’s forex price action.

How did AUD/USD react to previous reports?

Both the March and February employment reports printed better than expected results and resulted in gains for AUD/USD. However, the rallies were short-lived, as you can see from the 1-hour forex charts below:

March jobs data: 18.1K vs. 7.3K consensus, jobless rate down from 6.0% to 5.8%

AUD/USD 1-hour Forex Chart

AUD/USD 1-hour Forex Chart

February jobs data: 47.3K vs. 15.3K consensus, jobless rate steady at 6.0%

AUD/USD 1-hour Forex Chart

AUD/USD 1-hour Forex Chart

As you’ve probably noticed, the pair’s reaction to the release typically doesn’t last by more than a hundred pips and appears to be limited until the next major or minor psychological level. Aside from that, upon reversing from these inflection points, most of the gains are erased sometime around the U.S. session until the next trading day.

Do you think we’ll see a similar reaction in this week’s Australian jobs release? Share your thoughts in our comment box or cast your votes in our poll below!

  • ForExchange

    Great analysis. I like when you attach the previous data, it can show us great the reaction of the last reports.

    I have a question, do you think if the report would come out weaker than expected, then there will be still a rertracement or is the price going to consolidate on the lower levels? This would be great to know because I would be more likely interested on a retracement then on first reaction.

    Thanks,
    ForExchange

    • Forex Gump

      Thanks for the feedback! Yep I do try to take a look back at previous price reactions since those could serve as guides for the next releases.

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