June 4ththThe US and Canada released employment data for May. The US added 559,000 jobs to the economy against a forecast of 650,000, while Canada lost 68,000 versus an estimate of -20,000. Both are weaker than expected. The UK and Australia are releasing their respective employment data this week. Will they follow the same steps as the US and Canada, or will they surpass their peers and exceed expectations?
Change in the number of applicants in the UK
On Tuesday, the UK is to publish the change in the number of applicants for May. Current expectations are for a 62,000 drop in the number of applicants from -15,100 in April. This would be good news for the Bank of England as they have already begun the downsizing process and hope that fewer applicants will mean a stronger economy. At its last meeting, the Bank of England cut its bond purchases (shrinking) from £ 4.4bn per week to £ 3.4bn per week. They meet again on June 24th.th… A change in the number of applicants may affect their decision! However, on Monday, UK officials will decide whether to fully resume the economy on the planned date of June 21st.st or to postpone it due to recent variant coronavirus cases. Consideration should be given to whether a small increase in the number of cases is sufficient to damage vacancy data.
Everything you wanted to know about the Bank of England
Employment change in Australia
Australia is to publish employment data for May on Thursday. Current expectations are for an increase in the number of jobs by 40,000 against -30,600 in April. The division between full-time and part-time jobs is 20,000 each. In April, while headlines were weak, all the losses were in part-time jobs – -64,400.33,800 full-time jobs were added into the economy in April. Traders should pay close attention to the breakdown between full-time and part-time work in Australia. Restrictions in Melbourne were lifted after 2 weeks of the “stay at home” order, and vaccinations lag far behind most developed countries. While the lockdown was mostly in June, traders should consider whether the resumption of the virus has led to a slowdown in hiring in May. When did the RBA last meet on June 1stThey maintained their view that extremely favorable monetary conditions will be needed until at least 2024.
Australian dollar explained
GBP / AUD
Since May 2020, GBP / AUD has traded in a large, well-defined range between 1.7416 and 1.8527, after dipping below pandemic highs in March 2020. range. In addition, it has yet to trade above the 38.2% Fibonacci retracement from the March 2020 highs to January 6th.th minimum 1.8650.
Source: Tradingview, City Index.
If we focus on the shorter 240 minute timeframe, we can see that the GBP / AUD pair has broken the upper downtrend line of the aforementioned triangle (green) and returned several times to test it. The current trading range on this timeframe is between 1.8169 and 1.8452, where it was traded over the last month. The nearest horizontal resistance is higher at 1.8372 and then at 1.8452. If price breaks through the range, the next resistance is at the peak of the triangle near 1.8527. Support first on the descending trendline of the triangle (green) near 1.8200, followed by horizontal support at 1.8168 and 1.8105.
Source: Tradingview, City Index.
GBP / AUD was looking for a catalyst to push it out of its range not only last month (240 minute chart) but also last year (daily chart). With job vacancies in both the UK and Australia next week, it should be borne in mind that one or both events could be a catalyst. Throw in a narrowing BOE and the pair can go out of range in a short amount of time!
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