Overview of the Australian jobs report

Early Thursday markets will see Australian employment data from the Australian Bureau of Statistics at 11:30 Sydney/9:30 Singapore/HK and 01:30 GMT. Having witnessed mixed jobs data in May and the latest emphasis on the unemployment rate by the Reserve Bank of Australia (RBA) even after the rate cut, June month employment change, and unemployment rate become crucial for AUD/USD traders.

Market consensus favors a decline to 17.5KK from 28.4K of seasonally adjusted employment change whereas the unemployment rate is likely ticking down to 5.1% versus 5.0% prior. Also, the participation rate is likely to remain unchanged at 65.8%.

TD Securities emphasizes on last month's general election to be the key driver of likely boost to the employment scenario:

For May employment we expect an election bounce of +50k, skewed towards part-time as the Australian Electoral Commission (AEC) temporarily hires poll booth staff and vote counters. The July 2016 election saw a temporary jump of +73k part-time workers. A lift of +50k with an unchanged participation rate could see the unemployment rate dip again to 4.9% and put a nail in the July cut coffin.

How could the data affect AUD/USD?

Despite RBA’s latest rate cut, the central bank continues to highlight unemployment rate as a key driver of next policy moves, which in turn increases the employment data’s impact on the AUD/USD pair. With likely temporary uptick due to last month’s election, any disappointment from the data will be taken seriously to provide further damages to the Aussie pair.

Technically, 0.6900 and 0.6830 comprising January 2016 lows seem strong downside support with 0.6960 and 50-day simple moving average (SMA) level of 0.7010 being immediate resistance to watch during the quote’s pullback. Should prices rally past-0.7010, 100-day SMA level around 0.7065/70 can lure the bulls.

Key Notes

AUD/USD clings to 0.6930, all eyes on monthly employment report

AUD/USD analysis: under pressure ahead of Australian jobs data

AUD/USD technical analysis: Aussie ending the day on its low ahead of Australia job reports

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 release 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).

  • EUR/USD holds above the 2018- 2019 downtrend but struggles below the 200 week ma at 1.1347 and confluence with the 200 day ma at 1.1364.
  • Bulls can run towards 1.1570 2019 high as there is no resistance on the way there.
  • Momentum is slowing to the upside, so a focus is back to the wedges prior resistance line.
  • A break out of the interim and steep channel, bears will look to the 20 WMA at 1.1270 and prior wedge resistance.
  • Below there guards the 20 DMA ahead of the 1.1100 support.

  • Trade tussles, EIA report and strong greenback disappoint energy buyers.
  • Lack of data highlights political plays as the key catalysts.

With the unexpected rise in EIA inventories joining global risk-off and the US Dollar (USD) strength, WTI plummeted on Wednesday. Though, sellers are catching a breath near the key supports as the black gold flashes $51.10 on the chart during early Thursday.

The Energy Information Administration (EIA) recently reported 2.206 million barrels of increase in the US crude oil stocks during the week ended on June 07 versus market consensus of -0.481 million barrels and +6.771 million barrels prior.

Global investors are no longer cheering the US-Mexico deal as trade tussles between the US and China are heating up again with both the sides actively (indirectly) threatening each other.

Huawei is again planning to question the US ban over national security grounds while Chinese media keep terming the US President’s actions as unjust. On the other hand, the US President Donald Trump stands ready to levy fresh tariffs on the dragon nation’s products worth $325 billion if no solution/discussion takes place at the G20.

Despite the aforementioned pessimistic catalysts, the energy benchmark still refrains from declining beneath the early month low and six-month-old ascending trend-line.

While political plays surrounding the trade tensions could keep entertaining global energy traders, lack of oil specific data might trigger the benchmark’s pullback after the recent downturn.

Technical Analysis

An upward sloping trend-line stretched since late-December 2018 and current month low, not to forget the $50.00 psychological magnet, comprises of a broad support-zone between the $51.10 and $50.00. Should prices fail to bounce off and slip beneath $50.00, November 2018 lows around $49.40 and a late-December high near $47.00 could please the bears.

During the quote’s U-turn, three-week-old descending resistance-line at $53.20 could restrict immediate upside, a break of which can question current month high near $54.80.

  • Gold has extended its upside but meets and falls at shotterm trend resistance.
  • While above the 20-D EMA, 1314, bulls can aim for 1340 that guards a measured run towards 1357.66 as the 2014-2019 resistance line.
  • To the downside, 1326, 1320 and 1314 are guarding 1311 and 1303/06 to open 1297.
  • 1297 level meets the 50% Fibo retracement of the late April and early May double-bottom swing lows to recent spike high.
  • The 55-week ma sits at around 1260s and the 200-week ma comes in at 1250s.

  • 21-DMA holds the gate to confront tough resistances on the north.
  • Near-term rising trend-line restricts the downside.

Despite registering a noticeable increase on Wednesday, the USD/IDR pair presently struggles around 21-DMA to extend its latest upside as it quotes 14,343 during early Thursday.

Should buyers manage to extend recent advances beyond 21-day simple moving average (21-DMA), 38.2% Fibonacci retracement of October 2018 to February 2019 downpour and 200-DMA together constitute a tough challenge to them near 14,445/55.

During the quote’s additional rise past-14,455, seven-week-old descending trend-line at 14,550 could play its role of resistance.

Meanwhile, 14,270 and short-term ascending trend-line surrounding 14,192 can entertain sellers in the case of the pullback.

Furthermore, March month bottom near 14,055 and 14,000 round-figure might come back on the chart once traders defy 14,157 support.

USD/IDR daily chart

Trend: Pullback expected

  • EUR/JPY is correcting higher very near term but bulls are yet to take out the 50-D EMA.
  • Elliott wave counts point to a correction at this juncture.
  • Bears can aim for a test of the recent swing lows of 120.78 guarding a 119.91 78.6% Fibonacci retracement.
  • 118.50 will bring in the flash crash low territory.
  • On the flip side, a break of the 50-D EMA opens 125.40 ahead of the Dec low of 125.64.
  • The 200-D EMA is located at 126.50 ahead of the 26th Oct spike low at 126.63.