Market News & Analysis
AUD/USD Between a Rock and a Hard Place Ahead of Employment Data
Joe Perry January 23, 2020 5:03 AM
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.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.
Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.