Australian Employment Change


Fx News Spike Signals by Crazy Cat, 2018/11/14

Release Time: 19:30 New York time (EST)
Primary currency pair: AUD/USD
Forecast: 20K
Prior: 5.6K
LT1 (Lower Trigger 1): -30 [SELL]
UT1 (Upper Trigger 1): +30 [BUY]
Safety: 299

CAUTION: Australia doesn't have a formal news lock-up process for their economic news releases (except for Interest Rate Statements), and their method to release the data is much less efficient than in other countries. This leads to some variations in news providers receiving the data promptly on time. Although we subscribe to multiple news providers, there is always a possibility to have that report leaked before major news providers get it into their system. For that reason, I don't recommend trading big volumes on this report as this may or may not work. Watch out for pre-release price action and use a panic stop if you see price volatility right before the report.

It is also highly recommended to visit our news calendar to browse historic charts. While past performance may not necessarily repeat, at least you get a picture of what to expect.

If the Australian Employment Change comes out at -10K or more negative ( -30 trigger), AUD/USD should go down by about 25 pips. If it comes out at +50K or higher ( +30 trigger), AUD/USD should go up by about 25 pips.

I know these are quite big triggers but given how many issues we may have with Australian reports, if I were to trade it, at least I would like to see a solid trading signal.

In the event of a conflict between Employment Change and Unemployment Rate, we might see a quick retracement.

Based on 27 estimates, the median estimate for Australian Employment Change is 20K, as stated above, and the average estimate is 18.7K. The lowest estimate is 10K (four votes), then the second lowest is 11K (one vote), then 12K (one vote), then 15K (four votes), and then 18K (one vote), 20K (eight votes), 22K (one estimate), then 25K (five estimates), 27K (one vote), and finally 30K (one estimate). One standard deviation is +/- 5.7K, down from 8.5 last month.

We will also have Australian Unemployment rate coming out. It's NOT released at the same time so you cannot use Multireport Resolution feature. Based on the last six releases from the last six months, the Unemployment rate was published about 2 to 3 seconds after the Employment change.

Full-time and Part-time numbers were released even later, after the Employment Change and Unemployment Rate.

As always, just because reports were released in such order in the past, it doesn't mean they have to be released in that order again. However, it's very likely we will see them coming out in the same order again.

Furthermore, often Australian reports are leaked before they hit major news providers. Pay close attention to the price action and be prepared to abort if you see an unusual big spike before the signal is delivered.

Finally, there is always a risk that we might see a conflict between Employment Change and Unemployment Rate. Higher unemployment (positive deviation) is bad for AUD (selling pressure on AUD/USD) and lower unemployment (negative deviation) is good for AUD (buying pressure on AUD/USD). However, higher Employment Change is good for AUD/USD and lower Employment Change is bad for AUD/USD. Therefore, ideally, you would like to see positive deviation on the Employment Change and negative on Unemployment Rate, or positive deviation on Unemployment Rate and negative on the Employment Change.

A conflicting deviation of 0.1 on the unemployment number is not a big deal if we get a tradable deviation on the Employment Change but a conflicting deviation of 0.2 may give us a lot of headaches. Obviously, if the deviation on the Unemployment Rate agrees with the deviation on the Employment Change, then it would be to our benefit.

If the Employment change and unemployment rate conflict, then I still think we will have a spike based on the Employment change number but of course it depends on the degree of the conflict and overall mood of the market. Obviously, in the case of a conflict, I would look to exit as soon as possible.

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