Weekly Market Strategy - November 19, 2024 (Tuesday)

Trump trade continued last week, and with US long-term interest rates and the US dollar rallying, USD/JPY surged dramatically by 4.5 yen from the low 152 yen level to 156.75 yen.

Fed Chair Powell's hawkish comment on Thursday last week that "there is no need to rush rate cuts" further accelerated the dollar's rise. The Republican party's victory in the US House elections, resulting in a triple red outcome, also provided tailwinds for continued dollar strength.

At the start of this week, there was a moment when the pair was sold down to the low 152 yen level, but it is currently retesting the 154-155 yen range.

For USD/JPY, if there is a pullback to the 151 yen level, buy expecting another leg up, take profits at 156 yen, and cut losses below 149 yen.

WTI crude oil futures surged sharply from the mid-66 dollar level to 69 dollars on Monday after the US approved Ukraine's use of long-range missiles.

Meanwhile, Russia has deployed North Korean forces numbering around 10,000 troops along its border, increasing tensions.

The biggest headwind is China's weak economic outlook as the world's largest importer, but Trump's Iran and Venezuela sanctions are bullish factors.

WTI crude fundamentals are weak, but geopolitical risks make it difficult to sell.

Breaking below the year's low of 64 dollars on 9/10 is a long signal, take profits at 72 dollars, cut losses below 60 dollars.

Gold fell sharply last week to 2,440 dollars per ounce due to dollar strength, but rebounded sharply to the 2,600 range at the start of this week.

For gold, from a long-term perspective, buy breaks below the 2,600 dollar level. In the short term, wait.

US long-term interest rates may be topping out.

If US long-term rates continue to rise, dollar buying will continue, but it's unclear whether they will sustain the rally.