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Forex Signal (Wed November 10 2010, 7:30pm NY Time EST) - AU Employment Change

Discussion in 'Current Forex Trading Signals' started by Henry Liu, Nov 9, 2010.

  1. Henry Liu

    Henry Liu Former FPA Special Consultant

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    Australia Employment Change is similar to U.S. NFP (Nonfarm Payroll) and Canada Employment Change, this is an economic indicator for the Employment Changes in Australia, here’s the forecast:

    7:30pm (NY Time) AU Employment Change Forecast 20K Previous 49.5K
    AU Unemployment Rate Forecast 5.0% Previous 5.1%
    ACTION: AUD/USD BUY 50K SELL -10K


    The Trade Plan
    The deviation that we are looking for is at least of 30K. Historically a 25K~30K of difference has produced about 40~50 pips of movement in the direction of the difference about 75% of the time… Expect to see the effect of this news to last minimum 45 minutes to 2 hours… typical news effect should last under 2 hours. One other important news to pay attention to is the Unemployment Rate, which is expected to have dropped from 5.1% to 5.0%. If we do not get a conflict with the Employment Changes, then we will proceed with the trading plan.

    We'll look to trade this using after news retracement trading method, we'll wait for the market to retrace and stay out of the market during the release time. If we get a 50K of release, our bias will be to BUY AUD/USD; if we get a -10K of release, our bias will be to SELL AUD/USD. We'll only enter after we see a decent retracement from the initial spike.

    For more information on my trading methods:
    Henry's News Trading Methods

    The Market
    Australian Employment Change release is considered as a high impact report as the job’s market has direct influences over the entire economy, which in turn affects inflation, and inflation will affect future RBA monetary policy.

    AUD has been trading above the parity level and hovering around the 1.0100. Market has set the recent high at 1.0180 area, I'll be looking at that level for a possible resistance; if market breaches below the parity, then more momentum may follow.

    Additional Thoughts
    With USD rallying on the back of better than expected NFP release, traders are now second-guessing the Feds, which is going to make new high on the AUDUSD quite difficult... therefore my bias would be to sell AUDUSD on a rally...

    Pre-news Considerations
    There are no pre-news consideration for this trade, but my overall bias is to SELL AUDUSD on any significant rally.

    DEFINITION
    "Measures the change in number of employed people during the previous month. A rising trend has a positive effect on the nation’s currency. Job creation is an important indicator of economic health because consumer spending, which is highly correlated with labor conditions, makes up a large portion of GDP.”

    Historical Chart & Data For AU Employment Change


    Thanks,

    [​IMG]
     
    #1 Henry Liu, Nov 9, 2010
    Lasted edited by : Sep 8, 2016
  2. kasfulfx

    kasfulfx Recruit

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    Thanks henry!
     
  3. rifearmo

    rifearmo Recruit

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    thanks henry
     
  4. Ahmed H

    Ahmed H Private

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    thanks mate..
     
  5. james earthail

    james earthail Recruit

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    forex

    Dear sir,
    can you tell me which to buy.can you please give daily alerts
    james earthail
     
  6. ashwinks

    ashwinks Recruit

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    That was great -thanks Henry. I made some $$
    :)
     
  7. PipDog

    PipDog Corporal

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    I always find it interesting when you guys thank Henry and refer to making some pips on a 'No Trade'. How exactly did you do it this time? Please comment...we'd like to know.

    Henry said to buy/sell at +30/-30 on the Employment Change. The change was like +9...so no trade...then the market reacted to a spike in the Unemployment Rate jump to about 5.4%...downward.

    No reason to thank Henry. If you made some, you got lucky.
     
  8. peti305

    peti305 Wealthified Representative

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    The unemployment rate was much worse (5,4%), so with the retracement method, you could easily made about 20-30 pips by selling the AUD/USD. I made it too.
     
  9. PipDog

    PipDog Corporal

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    I'm not sure that you understand the Retracement Method. What occurred with this trade was a Reversal, not a Retracement. A Retracement is when a news release (with a proper deviation...a trigger) causes a pair to spike in a direction...up or down...then if things go well, the market Retraces for a period, then, after some more time, the pair again heads off in the direction that it did originally, due to the news release, giving us an opportunity to grab it during the Retracement and dump it after it heads off in the original direction. A Reversal occurs when, for whatever reason, the market heads in the direction that the news release promotes, then something else triggers a market Reversal...could be Resistance, another contradictory news event, risk aversion, etc...which is what happened here. The Employment Change came out +9K...good, but not enough for a trigger (remember, +/-30K?)...the AUDUSD shot up like 40 pips (if I recall), then the Unemployment Rate came out at 5.4%, which caused the pair to reverse hard.

    BTW, I also made some good pipage on this trade. The pair shot up before the news release (at least by my service), I saw the +9K number, thought that the +40 pips was way over-reacted, so I sold at 1.0076 then took profit incrementally with my last take profit at 1.0000. I did not see the 5.4% Rate until after I sold. So, I was lucky somewhat.

    And although I respect Henry's analysis of these news events, my actions had nothing to do with him. I either made money or lost on my own judgment alone.

    Besides, as I stated previously...it was a No Trade...no trigger!
     
  10. peti305

    peti305 Wealthified Representative

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    I understand the retracement method. You are right, the +9k was not much, it was a no trade. But the 0,3% deviation for the unemployment rate is A LOT & is tradeable!!

    Sometimes you have to think with your own head too, not only with Henry's. I think nobody expected for a 0,3% deviation from the unemployment rate. But thats a tradeable deviation.

    Just check the 1M chart again, and delete the +40 spike from the front in your head because thats a no trade as you mentioned too. But the 0,3% unemployment rate deviation is A TRADE if you use the retracement method, and sell the AUD/USD.
     

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