Carry Trade – Monthly Overview

The carry trade is flashing alerts that are difficult to ignore. As rate expectations shift, currencies tighten, and risk appetite remains fragile beneath the surface, the next move in FX could become one of the key macro signals for global markets. In this analysis, we assess the evolving dynamics across currency markets, examine the underlying technical signals, and outline the scenarios that could shape the next major macro move. CANDLES The last day of April brought a major surprise. The previously healthy carry-trade trend took a serious dent, as USD fell against JPY and formed a strong reversal signal, first on the daily frame on Thursday and then on the weekly frame on Friday. The monthly frame also closed with a Dark Cloud Cover on Thursday, but that signal still requires confirmation. Luckily, Thursday’s drawdown was not strong enough to damage the 2M and 4M closures. They remain bullish long…