The Australian Employment Change will be an important release today for the AUD as the release may very well determine the direction of the AUD for the week, especially after RBA had dialed down its easing bias during the last rate decision.
7:30pm (NY Time): AU Employment Change Forecast 15.3K Previous -22.6K
7:30pm (NY Time): AU Unemployment Rate Forecast 5.9% Previous 5.8%
Deviation: 25K (BUY AUD at +40.3K / SELL AUD @ -9.7K)
The Trade Plan
The deviation that we are looking for is at least of 25K. 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 rise to 5.9%. If we don't get a conflict with the Employment Change, 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 +40K of release, our bias will be to BUY AUD against other currencies; if we get a -10K of release, our bias will be to SELL AUD against stronger currencies. We'll only enter after we see a decent retracement from the initial spike and if we get those release numbers…
I’d recommend to use the Recommended Pairs from above as they are based on my CSM, which should provide the best combination of currency pairs to trade based on better/worse news… of course, you can also trade the default pair: AUD/USD.