Australian Employment Data: Why it Can’t be Trusted & Why it Doesn’t Matter:
Here we are again on the morning of one of the most highly anticipated data releases on the Australian economic calendar, employment data day!
“AUD Employment Change: -11.0K expected, 71.4K previously.”
“AUD Unemployment Rate 5.9% expected, 5.8% previously.”
It’s just too bad that the actual headline numbers have basically become the laughing stock of the trading community with nobody… and I mean nobody, trusting what the ABS releases. I like to use the ‘random number generator spin’ joke when the Chinese government releases their data from time to time, but really should be looking closer to home for this one.
A day after the laughing stock that was December’s number (+71.4K v the -10.0K expected), I tried to answer why the Australian employment data can’t be correct:
“1/8th of the 26,000 households surveyed each month by the Bureau of Statistics must be rotated from time to time. It is the fact that the newly surveyed households are sometimes very different to the old ones surveyed which is being blamed for the occasional jumpy nature of Australian unemployment data.”
And once again I’ll repeat that the fact the numbers are right or wrong, doesn’t actually matter to us as Forex traders. The only thing that matters is price and the perception of where traders think price should be. Just remember that if you’re trading around an obviously insane number.
Chart of the Day:
Leading into the Aussie employment data, we have to take a look at the AUD/USD chart. Just keep in mind the big picture with our old friend the weekly trend line support is still in play.
But it’s the hourly that I wanted to focus on today, with price forming a short term bullish channel following the pair’s solid beat down that it has experienced all of January.
With price teetering on the brink at support, we’re set up nicely for the 11.30am Sydney time employment data release. Are you trading the AUD/USD channel into the release or waiting for the dust to settle?
On the Calendar Thursday:
AUD Employment Change
AUD Unemployment Rate
GBP MPC Official Bank Rate Votes
GBP Monetary Policy Summary
GBP Official Bank Rate
USD Unemployment Claims
Dane Williams – @VantageFX
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