Market Strategy for This Week - July 2, 2024 (Tue)

The most impactful event last week was when Finance Ministry official Kanda stated that they would not hesitate to intervene if USD/JPY surges. Nevertheless, USD/JPY broke through the 160 yen ceiling and reached 161.281 yen on Thursday. This marks the weakest level since December 1986. Yesterday, it further rose to the latter half of the 161 yen range. However, the aforementioned official Kanda also began saying that if the yen weakens by 20 yen per year, that would be considered a surge. It has risen exactly 20 yen from the beginning of the year at 141 yen, so we may finally be at intervention levels. The market is nervous. If intervention occurs, a sharp drop to around 155 yen seems likely. That would be a buying opportunity!

Gold was slightly weak last week but did not break below 2,300 dollars. It remains far from the target of 212 dollars. This strategy report predicted that US long-term interest rates would rise last week, and that proved correct, yet gold did not decline. Shifting strategy to a buy-on-dips stance around the 2,300 dollar level. This is because gold maintains an upward bias in the long term!

WTI crude oil is drawing attention due to increased summer demand and new Middle East conflicts (Israel and Hezbollah in Lebanon), with the price updating recent highs at the mid-83 dollar level. From a chart perspective, an uptrend is forming. It's unclear whether it will break below 80 dollars.

In summary: USD/JPY is recommended as a buy around 155 yen as Ministry of Finance intervention seems likely from here. Gold is a long-term buy above 2,300 dollars. Oil is recommended as a long position in the 80 dollar range while waiting for a pullback.