Carry Trade – Monthly Overview
Is the Dollar Ready to Resume Its Structural Advance?
After a sharp shift in posture at the beginning of February, the carry trade has regained stability and is once again approaching a critical decision point. With momentum rebuilding, long-term trends still intact, and consolidation scenarios still viable, the next move in the Dollar could have broad implications for currencies, bonds, and global risk assets.
In this update, we examine the technical structure behind the carry trade — from trend dynamics and momentum signals to long-term wave projections — to assess whether Dollar strength is set to expand or transition into a prolonged consolidation phase.
CANDLES
After showing weakness in early February, the Dollar recovered and transformed what initially appeared to be bearish reversal signals into neutral-to-bullish closures on the monthly and 2M frames. All mid- and long-term trends remain bullish, and the carry trade continues to look technically healthy.
ELLIOTT WAVES
The long-term targets for the USD/JPY pair remain intact. While the development of a larger wave 4 scenario is still possible, its probability has been reduced following the monthly close.
Summary
The carry trade has recovered from a strong bearish posture seen at the beginning of February. The odds now slightly favor continued Dollar strength, though horizontal consolidation remains a valid alternative. If that scenario unfolds, it could extend for several months.
The very long-term outlook remains bullish. Broader structural targets are intact, and the recent weakness appears corrective within a larger uptrend.
