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Forex Signal (Wed. October 6 2010, 8:30pm NY Time EDT) - AU Employment Change

Discussion in 'Current Forex Trading Signals' started by Henry Liu, Oct 5, 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:

    9:30pm (NY Time) AU Employment Change Forecast 20K Previous 30.9K
    AU Unemployment Rate Forecast 5.1% Previous 5.1%
    ACTION: AUD/USD BUY 55K SELL -1K


    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 remain at 5.1%. 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 55K 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 on the rise and maintaining strength on the back of weaker USD... However, yesterday's surprise move by RBA to keep rates unchanged has already changed the sentiment for RBA. With under 20% of probability that RBA will hike rates in November, the next chance for RBA to hike rates will be in February, therefore the next four months should provide plenty of reason for AUDUSD to drop down, and this release may just be the catalyst to start the downward move.

    Additional Thoughts
    AUDUSD is a slow moving currency, but combining with a worse employment and no chance for a rate hike, AUDUSD could drop sharply... therefore we could look to trade this release with a longer term view... However, if we get a stronger release, market may not be ready to move AUD up much, therefore we could position ourselves for a short trade from the top.

    Pre-news Considerations
    There are no pre-news consideration for this trade.

    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, Oct 5, 2010
    Lasted edited by : Sep 8, 2016
  2. Piotr1

    Piotr1 Recruit

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    How to avoid situation like this.

    Hi. This is news event on Aud/Usd today (10/6/10).I placed two pending orders before news, but the good one :) was not accepted by server (FXDD broker) . This train left without me... If somebody can advice me, how to get into that trade in situation like this I will very appreciate it.
     

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  3. amadeo

    amadeo Recruit

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    Just change to other broker!! .. ahahaha
     

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