Carry Trade – Weekly Analysis

In a market full of noise, interventions, policy shifts, and constant speculation, the larger technical structure has continued to follow the same roadmap. In this analysis, we reassess USD/JPY through major currency dynamics, technical signals, and long-term structure to determine whether the bullish path still holds, what could invalidate it, and what may shape the pair’s next major move.

CANDLES

The week completed with neutral signals across multiple short- and mid-term frames, possibly pointing to an extended correction. Still, all bullish trends remain intact.

USD/JPY remains firmly bullish long term.

ELLIOTT WAVES

The long-term targets for USD/JPY remain intact.

The pair made a new higher high above the top of wave 3, which lowers the probability of the alternate blue wave 4 scenario. However, the recent move upward looks corrective, implying a higher probability for an extended corrective wave — either horizontally or slightly lower — as modeled on the daily candle chart.

Summary

The carry-trade picture remains stable on the larger frames, but short-term caution is still warranted.

USD/JPY remains firmly bullish long term, and the latest higher high keeps the broader upside roadmap intact. However, the recent move looks corrective, which increases the chance that the pair may continue consolidating sideways or slightly lower before the next major leg higher.

For the carry trade, this means the structural bullish setup has not broken, but the near-term environment may stay more fragile. If USD/JPY extends its correction, it could create temporary pressure on Yen-funded positions and add volatility to risk assets.

Overall, the carry-trade risk is tactical rather than structural at this stage. The long-term bullish USD/JPY outlook remains intact, but the next phase of the correction should be watched closely.