When is the Australian employment report and how could it affect AUD/USD?

December month employment statistics from the Australian Bureau of Statistics, up for publishing at 00:30 GMT on Thursday, will be the immediate catal  |  20/01/2021 23:43

December month employment statistics from the Australian Bureau of Statistics, up for publishing at 00:30 GMT on Thursday, will be the immediate catalyst for the AUD/USD pair traders. The figures become all the more important as traders will be keen to observe how much employment damages lockdown in Sydney and Brisbane did amid the coronavirus (COVID-19) resurgence.

Market consensus favors Employment Change to drop to 50.0K from 90.0K on a seasonally adjusted basis whereas the Unemployment Rate is likely to ease from 6.8% to 6.7%. Further, the Participation Rate may rise a bit to 66.2% from 66.1% prior.

TD Securities expect a positive surprise from the data while saying,

We expect headline employment to increase by 60k (market expectations +50k) in December, after the 90k increase in November. Employment is likely to rise further as more part-time workers find work during the holiday season and elevated job vacancies reflect healthy labor demand. We also anticipate a pickup in the participation rate to 66.2% (market forecasts 66.2%) as the economy reopens and the vaccine rollout boosts confidence for both consumers and businesses, encouraging higher labor force participation in the near-term. Our forecasts imply the unemployment rate should be 6.6% compared with the 6.8% November print.

Additionally, analysts at Westpac said,

Westpac expects that 60k jobs were created (market consensus is 50k), which should offset a rise in participation and see the unemployment rate fall to 6.7% from 6.8%. The consensus is +50k and 6.7%, after November’s 90k surge (consensus was 40k, highlighting the scope for surprises).

How could the data affect AUD/USD?

Considering Joe Biden’s arrival to the White House as the 46th US President, backed by the recent executive orders, market optimism is likely to keep the AUD/USD bulls happy and hence any positive employment data, as expected can add strength to the quote. It should be noted that smaller-than-expected job gain will push for the RBA’s QE extension and can offer a knee-jerk reaction to the prices. However, that needs a strong negative to defy the present upside momentum.

Technically, AUD/USD bulls need a confirmatory breakout of the previous support line from November 02, at 0.7755 now, to aim for the two-week-old trend line resistance near 0.7800 and the monthly peak of 0.7820. Alternatively, a 21-day SMA around 0.7700 restricts the pair’s short-term downside.

Key Notes

Australian Employment Preview: Upside risks seen to the labor market recovery

AUD/USD Forecast: Resuming gains, eyes on employment data

AUD/USD ranges just to the south of 0.7750 mark ahead of key jobs data

About the Employment Change

The Employment Change released by the Australian Bureau of Statistics is a measure of the change in the number of employed people in Australia. Generally speaking, a rise in this indicator has positive implications for consumer spending which stimulates economic growth. Therefore, a high reading is seen as positive (or bullish) for the AUD, while a low reading is seen as negative (or bearish).

About the Unemployment Rate

The Unemployment Rate released by the Australian Bureau of Statistics is the number of unemployed workers divided by the total civilian labor force. If the rate hikes, indicates a lack of expansion within the Australian labor market. As a result, a rise leads to weaken the Australian economy. A decrease of the figure is seen as positive (or bullish) for the AUD, while an increase is seen as negative (or bearish).