Market Strategy for This Week - Tuesday, December 3, 2024

Last week, aside from Tuesday's FOMC meeting minutes and Wednesday's Core PCE inflation data, we thought there would be no major economic indicators or events, but the market moved significantly due to Trump's comments on social media about imposing tariffs on China and Mexico.

USD/JPY has been volatile with a bearish bias. Additionally, on Friday, Tokyo's inflation rate jumped to 2.6% from 1.8% last month, causing USD/JPY to plummet sharply from the mid-151 yen level to the mid-149 yen level. Yesterday it fell below that low, down to just below 149 yen. With the Fed cutting rates and the possibility of the Bank of Japan raising rates, USD/JPY could decline to around 145 yen.

USD/JPY is likely to see yen strength due to the central banks pursuing opposite policies. The USD/JPY long position established last week should be stopped out below 149 yen. From here, a sell strategy is recommended after waiting for a rally.

WTI crude oil futures: Although Israel and Hezbollah agreed to a ceasefire, Israeli airstrikes continue, and with anti-government forces in Syria taking control of Aleppo, Syria's largest city, Iran has stated it will support Syria, making the situation tense. Prices are trading below $70 but remain firm. The focus will be on whether the OPEC+ meeting on December 5th approves a delay in production increases.

WTI crude oil fundamentals are weak, but geopolitical risks prevent selling. Rather, the direction could be bullish depending on OPEC+'s stance. Long around the mid-$65 level, near this year's low on 9/10. Take profit at mid-$72, stop loss below $60.

Gold is stuck in the $2,600 range due to Middle East geopolitical risks.

For gold, from a long-term perspective, buy below $2,600. Short-term: short at $2,725, stop loss at $2,800, take profit at $2,550.