NZ Dollar Buy Strategy, Surprising Strength! NZ Unemployment Rate Announcement ~ NZ Dollar Buy Strategy on November 7 ~

◎Strategy and Current Holdings

NZD Buying Strategy

Holding a Long NZD/JPY position

Today’s release ofunemployment rate shows surprising strength!

Quarterly unemployment rate (quarter-over-quarter): 3.9% (expected: 4.5%) — a surprising3% range emerged.

It is said that unemployment below 5% is stable, and below 4% suggests not full employment. Even when the US started rate hikes, it was in the 4% range. In this context, the figure well above expectations at 3.9% may or may not be temporary;depending on inflation, rate hikes might begin sooner than expected.I think so.

NZD/JPY Daily Chart

NZD/JPY Weekly Chart

On the daily chart, a WW bottom!? After repeating a W-bottom twice, it has broken through the previously capped resistance line.

On the weekly chart, it has broken out of a downtrend channel.

Also, as seen on the weekly chart, the New Zealand dollar is in a low price range. Looking at the chart, there seems to be an upward momentum.

◎ Outlook

RBNZ interest rate decision is scheduled for tomorrow.Consensus is to hold the policy rate at 1.75%.The accompanying statement will be closely watched. Important indicators to watch in the statement are summarized below.

First, the previous unemployment rate and employment figures.Unemployment remains steadily around 4%. This time, it has moved into the 3% range. Employment has also been steady. It seems the NZ government’s reform proposal to maximize employment (a dual mandate for employment and price stability) is being met.

Regarding the price level target,the aim is to guide inflation within a 1–3% annual range, with a center around 2%.Looking at the Consumer Price Index (year-on-year), it is slightly below 2% but still within the range.

Therefore, if a rate hike is anticipated, the numbers would be convincing. Also, what is still missing to hike rates? How does the outlook for the economy look ahead? How does the timing of a rate hike appear?

I want to assess this in tomorrow’s statement. If the content is hawkish, I expect the weekly chart’s blue line at around83.00 to rise to approximately.