Weekly Market Strategy - November 5, 2024 (Tuesday)

Of the two main events last week, the Bank of Japan's Monetary Policy Decision Meeting on Thursday decided to maintain the policy interest rate, but at the press conference, Governor Ueda made hawkish remarks suggesting future rate hikes, causing USD/JPY to temporarily sell off from the mid-153 yen level to the late 151 yen level. Additionally, Friday's employment statistics showed non-farm payroll additions of 12,000 against expectations of 113,000, a surprisingly small figure. This appears to be due to the impact of strikes at Boeing and two hurricanes. Following this result, the dollar index was bought and USD/JPY rebounded sharply. At the start of the week, the market showed weakness, trading around the 152 yen level.

Today is the presidential election. With Trump favored, dollar buying and rising long-term rates should push USD/JPY higher, and gold selling is expected. However, anticipating this, gold has been declining from last week's record high of 2,801 dollars (I had said "the upper level should be around 2,800 dollars") and is now near 2,740 dollars. After continuing to fall a bit more, there will be one more attempt at the upper level, but after that, from late year through early next year, I expect a significant decline. Long-term recommendation is long, but in the short term, I don't want to chase it.

WTI crude oil has rebounded sharply. OPEC+ appears to have withdrawn its production increase plans. Iran seems to be considering retaliation against Israel, so geopolitical risks remain, but fundamentals are still weak!

In summary, USD/JPY should be bought on any correction to the early 151 yen level. Take profit at the mid-155 yen level. Stop loss if it breaks below 149 yen. Gold: wait and see. However, for a long-term outlook, wait until the 2,600 dollar range. Crude oil: short around the 74 dollar level. However, if it exceeds 78.46 dollars, stop loss. Take profit at 66 dollars.