Weekly Market Strategy - October 1, 2024 (Tue)

Following last week's LDP presidential election, the yen strengthened as fiscal stimulus advocate Takaichi was leading, with the Nikkei stock index and USD/JPY rising until Friday afternoon. However, when the runoff results showed Ishiba's victory, both the Nikkei and USD/JPY crashed dramatically! USD/JPY plummeted from the mid-146 yen level to 142 yen, a sharp drop of 4.50 yen. The market continued to decline in early Tokyo trading this week. The key focus this week is Friday's employment statistics. Even if USD/JPY rises from here, the maximum resistance is around mid-146 yen. Afterwards, targeting the downside of 137 yen. Therefore, selling after the rise is recommended.

Since last week, with long-term interest rates and the US dollar remaining firm from the start of the week, gold has been pulling back after hitting 2700 dollars. Gold appears likely to have one final rally before year-end after a slight decline from here. A long position is recommended while waiting for a correction, but it should be kept short-term. There may be a pullback from year-end into the new year.

Last week, WTI crude oil fell sharply as Saudi Arabia changed its sales strategy and decided on a major production increase in December. However, with Israel having killed Hezbollah's leader in Lebanon and being willing to conduct ground invasion operations, the price has rebounded to 69 dollars. China's People's Bank stimulus measures are a bullish factor. However, Saudi Arabia's production increase is a powerful bearish factor.

In summary, USD/JPY is looking for a selling opportunity in the short term. For short-term trading, a short strategy at 145 yen. The downside target is 137 yen, so take profits before reaching that level. Gold: buy at 2560 dollars short-term. Stop loss if it breaks below 2500. However, take profits above 2700. Oil is highly likely to decline once more, so short at 75 dollars.