Market Strategy for This Week - August 27, 2024 (Tuesday)

The market's biggest focus last week was how much rate cut would occur at the September FOMC, but at Friday's Jackson Hole Symposium, Fed Chair Powell gave a speech that essentially confirmed a September rate cut with the statement "the time has come to adjust interest rates." However, he did not mention the magnitude. As a result, US long-term yields tested lower and the US Dollar Index, which had been consistently declining, closed at its lowest level this year (rebounded at the start of the week). Following this, USD/JPY also declined by 4.5 yen from 148 yen to the mid-143 yen range before rebounding. USD/JPY will likely test lower again, but from the latter half of this week into next week it appears likely to test higher again. However, in the medium to long term, the downtrend in USD/JPY is likely to continue at least until around May next year. So the question is: should we buy the correction dips in the short to medium term, and target shorts in the medium to long term?

Gold is updating all-time highs and is currently near $2,550. Since gold remains bullish for the year, we recommend waiting for corrections to around $2,450 and taking long positions.

WTI crude oil is experiencing a sharp rebound to the $77 level due to geopolitical risks in the Middle East from Hezbollah-Israel tensions, combined with Libya, a major oil-producing nation on the African continent, announcing the application of force majeure clauses to crude oil exports.

In summary: USD/JPY - seek buying opportunities in the short term, take profit and short around 151-153 yen. Gold - buy at $2,450. For short-term positions, stop loss below $2,300, but long-term holding is strongly recommended. Crude oil - long recommended in the $72 range. For short-term positions, stop loss below $70.