Weekly Market Strategy – June 11, 2024 (Tuesday)

Lately, the US has seen weak economic indicators, but last week's employment data was a positive surprise. Non-farm payrolls increased by over 100,000 from the previous month to 272,000, far exceeding the expected 185,000. Conversely, the unemployment rate hit 4.0%, the highest in two and a half years. After all, isn't this because of a sharp surge in immigration!?

Following this, US long-term interest rates and the US dollar index surged. USD/JPY, which fell to the 154 yen level in the middle of last week (so we've been holding long at 155 yen as recommended last week), jumped to the 157 yen range following the dollar strength after the employment data. Yesterday it was flat, but from here we might want to take profits on any upside move.

This week features US Consumer Price Index Wednesday night, FOMC early Thursday morning, and the Bank of Japan's decision meeting on Friday – making this the biggest event week of the year. A retest of 160 yen is possible...

Gold surged above 2,400 dollars last week due to continued declines in US long-term interest rates, but immediately following the employment data, both US long-term interest rates and the US dollar index surged, causing gold to plummet nearly 3% to end the week. Our strategy report had predicted a sharp decline in gold, so it finally happened! The timing for buying gold is approaching. Gold still maintains an upside bias over the long term!

WTI crude oil has continued to decline due to the fatally misguided decision by the OPEC+ summit the weekend before last to phase out the voluntary production cuts of 2.2 million B/D starting in October! It recovered on value buying yesterday, but from a chart perspective it looks likely to decline through mid-July.

In summary, USD/JPY appears near its peak, so from here it's profit-taking priority with an upside target of 160 yen. Gold is a long buy below 2,212 dollars, and crude oil is waiting for short-selling opportunities in the near term.