This Week's Market Strategy - December 24, 2024 (Tuesday)

Last week was central bank week. The FOMC decided on a 0.25% rate cut as expected, but was hawkish by reducing the pace of rate cuts in 2025 from 4 times (as of September) to 2 times, causing the US dollar index and US 10-year yields to surge. In tandem, USD/JPY was also bought. Following this, the Bank of Japan's Policy Board meeting had pre-existing rate hike expectations, but ultimately maintained the status quo. However, Governor Ueda repeatedly made dovish comments during the press conference stating that at least the spring wage negotiations results were needed before any rate hike, so USD/JPY surged to just below 158 yen by week's end. This week starts with minimal momentum due to the Christmas holiday.

USD/JPY has heavy resistance with 160 yen approaching and the Christmas holiday period. From here, a selling strategy is recommended waiting for an upside attempt. Stop loss above 160 yen, take profit in the early 155 yen range.

WTI crude oil futures rose last week as the US PCE inflation data on Friday came in below expectations, rekindling hopes for further rate cuts next year, which led to expectations of increased energy demand. However, this week started with a decline.

WTI crude oil fundamentals are weak, so gains are limited. Therefore, a buying strategy waiting for a pullback is preferable. Around 65 dollars, near the year's low from September 10, is a long entry. Take profit at 72 dollars, stop loss below 60 dollars.

Gold declined to around 2,620 dollars per ounce yesterday due to higher long-term rates and a stronger dollar at the start of this week.

For gold on a long-term basis, breaking below 2,600 dollars is a buy. Short-term: short at 2,725 dollars, stop loss at 2,800 dollars, take profit at 2,550 dollars.