AUD/USD Between A Rock And A Hard Place Ahead Of Employment Data

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 crapshoot. 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 jobs and part-time jobs. Add to that any possible delays in hiring because of the wildfires, and December’s data maybe even more difficult to surmise. 

Now the fun part…add in a chart of the AUD/USD:

(Click on image to enlarge)

Source: Tradingview, FOREX.com

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

  (Click on image to enlarge)

Source: Tradingview, FOREX.com

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.