This Week's Market Strategy - June 18, 2024 (Tuesday)

The two major events last week—the FOMC early Thursday morning and the BOJ decision meeting Friday noon—both saw USD/JPY purchased heavily immediately afterward. Since USD/JPY was trading in the mid-155 yen range last Wednesday, we've seen a sharp spike of nearly 3 yen! Despite US long-term interest rates continuing to decline, the US dollar index rebounded sharply on Thursday and Friday. In last week's strategy report, we mentioned there could be a retry of 160 yen... and that move appears to be happening. However, with USD/JPY rising continuously from 140 yen at the start of the year, a peak timing seems quite imminent! Perhaps by the end of this month?

Gold was trading around $2,300 last week when softening US CPI was reported, causing it to rise, but ultimately it moved sideways in a narrow range of $2,300-2,360. In this strategy report, we forecast that next week US long-term interest rates will rise and gold will plunge until the end of June, so there are no changes to the strategy. We maintain a buy-on-dips stance. This is because gold still has an upside bias in the long term! WTI crude oil saw last week's price rise to the $79 range as the US Energy Information Administration (EIA) and OPEC forecast robust global demand growth. After the start of this week, as stock prices rose, crude moved past $80. However, from a chart perspective, we see a decline expected from this week through mid-July. We anticipate a bottom forming in the early $70s.

To summarize: USD/JPY is a buy in the very short term but appears near a peak, so profit-taking is recommended. Our upside target is 160 yen? Gold is a long-term buy below $2,212, but if that doesn't materialize by month-end, buying is also an option. Crude oil: are we looking for a short-term selling opportunity?