In Australia tonight the Employment statistics for the month of October will be released with the following expectations:
- Employment gain of 20K vs. -23.7K last month.
- Unemployment Rate is expected to come in at 6.2% vs 6.2% last month.
- Full time employment rose by 21.6K last month.
- Part Time fell by -51.3K.
- Participation rate is expected to remain unchanged at 64.5%.
Remember last month, the RBA had a “do over” after the oversized original gain of +121,000 jobs in August after deeming the seasonal adjustments to be faulty. The confidence in the data is therefore a bit reserved. I personally would be a bit wary of the number.
The Trends in the Australian Employment
From a technical perspective, the AUDUSD started the day near the high. It also started the day next to the 100 hour MA (blue line in the chart below).
AUDUSD hourly chart has upside targets at 0.8619, 0.8639 and 0.86625
The price fell from there and continued to trend lower. Most of the bearish work had been done before the NY entered for the day, although there was enough oomph left to push to a new low for the day and the year at 0.8564.
On the downside, the 50% of the move up from the 2007 low to the 2011 high comes in at 0.85423 and this level will be a key level on a more bearish (weaker) employment report. If the price can get and stay below that level, look for a bigger move lower.
On the topside, the 0.8918 is the closest resistance against the broken trend line on the hourly chart. Above that the retracement levels of the trend move lower today will be eyed. The 38.2% of the move lower today comes in at 0.8639. The 50% of the move down comes in at the 0.86625.
In trend moves – like we saw today – if the sellers like the direction, they should to trade on rallies against these resistance levels. If the price moves above the 38.2% and 50% correction zone (yellow area in the chart above), they don’t love it anymore. Did the market know something today? Is the employment trend lower as a result of expected softer China economy? We will know at 7:30 PM ET/11:30 PM GMT.
AUDUSD on the monthly chart has key support at 0.85423.
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