Profit Mongers @ 10:56 AM, Wednesday January 12 2011
Hello Traders! Finally some news to trade this week.
1930 AU Employment Change and Unemployment Rate (25K expected, 54.6k prior, 10k to 39.6k range)
Affliated Reports:
AU Unemployment Rate (5.1% expected, 5.2% prior, 5.0% to 5.2% range)
Last month a 24.6k deviation on this figure caused a nice spike of 55 pips and only pulled back some 15 pips for some decent follow thru for an additional 30 pips over the next half hour and 50 pips over the next 2 hours if you were able to hold it that long. This was with a flat reading on the unemployment rate with no deviation as expected. Both the Employment change and rate are both important and last month they conflicted with both coming out higher (Higher Umemp Rate is bad, Higher Emp Change is good). In november for instance there was a higher rate and change; the change came out a second or 2 before the rate and drove prices higher then the higher and thus WORSE unemployment rate came out and drove prices down. This sort of conflict is rare however and when it does occur our 20k trigger has never been hit, so although this means we have to take some care with this report it can also set us up for an opportunity if there is any delay between the releases.
While Australia has been hit by terrible floods recently which has slowed the commodities businesses, this release is for December. Jobs advertised advertised increased 2 percent which was less than the 3% advance in November. Also Retail Sales was as expected on Sunday night. Traders must remember that the market is forward looking so despite the numbers the situation with the weather will still be influencing traders. Regardless the market should react to our triggers but we have to be careful on longer term positions based on the number. AUSDUSD has got hit hard and last night it was announced that a -1% reduction in GDP due to the slowdown caused by the weather could occur. The AUDUSD sold off by 60 pips but as Tokyo opened it got bought and with the general weakness in the USD seen today, the AUDUSD finally got a lift back above 0.99.
If Employment comes out at 45K or higher (and UR doesn't come out high), AUD/USD should rally 50 pips.
If Employment comes out at 5K or lower, (and UR doesn't come out low), AUD/USD should drop 50 pips.
If UR comes out at 5.3% or higher, (and Emp. doesn't come out too high), AUD/USD should drop 50 pips.
If UR comes out at 4.9% or lower, (and Emp. doesn't come out too low), AUD/USD should rally 50 pips.
Spike Traders - Be prepared with panic stop in case of a leak.
Afterspike Traders - If the deviations are significant and both numbers agree, price could shot up in the first minute quite a bit, and there my be little retracement. Allow prices to settle a bit but be prepared then the get in on a follow thru extension.
Futures traders, be mindful of volume again, even a large deviation can give you quite a bit of slippage on AUD trades. You can certainly trade it using small lots and of course afterspike trades can also work. Direction is the same.
Enjoy the pippage,
Magister Pips
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