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Trading the : Australian Employment Change:

Discussion in 'Market Predictions and Reports' started by Huskins, Apr 11, 2012.

  1. Huskins

    Huskins Former Special Consultant to the FPA

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    The Way Its supposed to work:
    Employment is one of the leading indicators of the economy, more people employed should equal to more economic activity since employment not only puts the much needed dough in peoples wallet but also makes them feel better about future prospects. Employment reports are amongst the most watched reports traders, analyst and the news media, carefully dissect the employment report.
    Expectation:
    The economists expect the report Dated: 11th April 2012, on the Australian Employment Change to register 1 K to 11 K growth in employment and the unemployment rate to increase from 5.2 to 5.3 %
    How the “So called Gurus” and Analyst” expect us to trade this report:
    There are several possibilities they say :
    1) Within expectations: 1.0K to 11.0K: They expect the report not to have much of an impact
    2) Slightly above Expectation: Australian Economic activity has expanded more than expected, hence AUDUSD Should Increase in value and reach a Resistance Level
    3) Significantly Above expectations: Australian Economic activity has significantly expanded much more than expected, hence AUDUSD Should Increase in value and break a Resistance Level
    4) Slightly below Expectation: Australian Economic activity has contracted more than expected, hence AUDUSD Should decrease in value and reach a support Level
    5) Significantly Below expectations: Australian Economic activity has significantly contracted much more than expected, hence AUDUSD Should Increase in value and break a support Level


    Now only if the so called “Gurus” and “Analyst” were profitable traders themselves!!! I hope its not the case that they are strategic in misleading the public, I hope that they are just pawns of the smart money, making the dumb money do what the smart money wants it to.
    Let us analyze history to see what the smart money does with this report…
    Looking at the last 5 instances and beyond, I have found out that the immediate reaction to the report is not sustained, though I may have an economic theory behind why this may happen , tahts for another blog post, lets concentrate on what happens rather than why it happens.
    So coming back to the Initial report, yes Indeed whenever we have the data come out better than expected, the AUDUSD has indeed gone up and Similarly when ever we have had Worse than expected Aussie employment report the AUD/USD has in fact gone down, however these moves has historically been very short lived, generally the moves last for 1 or 2 Mins , where some moves have lasted silightly longer , however once the directrional move is made the currencies seem to take the Reverse of the Initial direction, so if the news cases the AUD?USD to pike up, the “Main” move happens downwards, generally lasting for quite a few hours. This I believe is the main trade.

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