Carry Trade – Weekly Update
In this update, we examine the evolving dynamics of the carry trade, highlight the technical patterns driving the latest move, and map the scenarios that could shape the path ahead—including the outlook for the annual close.
CANDLES
The carry trade remains healthy across multiple time frames. It closed the week with a Bullish Engulfing on the daily and an unconfirmed Dark Cloud Cover on the weekly. Despite the Dollar’s broader softness, it continues to advance against the Yen toward levels not seen since 1986. The trend remains bullish until signaled otherwise. Unless the trade experiences a sharp 3–4% or larger decline in the remaining days of December, both the quarterly and annual signals are expected to finish decisively bullish.
ELLIOTT WAVES
The long-term targets for the USD/JPY pair remain intact.
The long-term targets for the USD/JPY pair remain intact.
Summary
USD/JPY remains bullish for the greenback following the November close. Momentum is strong, and an acceleration over the next one to two years remains a plausible scenario.
The Dollar remains bullish until evidence to the contrary appears on at least the weekly frame.
Happy Trading!
