End of Carry Trade | Page 3 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Carry trade vs carry trader 3 replies

Can you teach me Carry Trade and Swing Trade? 5 replies

Is This The End of the Yen Carry Trade? 39 replies

End of the Carry Trade? 3 replies

hedging the carry trade 2 replies

Attachments: End of Carry Trade
Exit Attachments

End of Carry Trade

  • #41
  • Aug 10, 2007 3:25am Aug 10, 2007 3:25am
Quoting Clusterwise
Good day all

If I am right, it's the end of cary trade

What do you think? Is it possible?

Yen is heading 109 then 101.69 by the end of October 2008

Many thanks
Excuse me, but what I actually believe is that the USD/JPY is not in a long term uptrend, unlike, GBP/JPY, EUR/JPY and AUD/JPY and other JPY crosses having high interest rates differential.

I have attached 3 charts of the mentioned 3 pairs and the major trendline can be seen on each chart. Only the violation of such trend lines can make you worry about the carry trades. Other wise, everything is going fine...


Thanks,

Nader
Attached Image(s) (click to enlarge)
Click to Enlarge Name: EUR-JPY.jpg Size: 46 KB
Click to Enlarge Name: GBP-JPY.jpg Size: 48 KB
Click to Enlarge Name: AUD-JPY.jpg Size: 47 KB
  • #42
  • Aug 10, 2007 7:21am Aug 10, 2007 7:21am
Hi

A bit off topic, but I was wondering how carry trade works - Let's say hypothetically that I take $1m loan in Japan , and invest it in some kind of Iceland / New Zealand bonds or whatever... So , if there's no movement (hypothetically!) in both currency pairs , I'll get my 10% or more... But let's say it moves... Can I defend my investment using a contract on currency rate? Is there such a thing?
And say there is, if there was a move against me , what would be there damage to my investment? Would I lose money or just get less yield?

Have a good weekend!
Money for nothin' and pips for free!
  • #43
  • Aug 10, 2007 7:35am Aug 10, 2007 7:35am
Quoting ltklev
Hi

A bit off topic, but I was wondering how carry trade works - Let's say hypothetically that I take $1m loan in Japan , and invest it in some kind of Iceland / New Zealand bonds or whatever... So , if there's no movement (hypothetically!) in both currency pairs , I'll get my 10% or more... But let's say it moves... Can I defend my investment using a contract on currency rate? Is there such a thing?
And say there is, if there was a move against me , what would be there damage to my investment? Would I lose money or just get less yield?

Have a good weekend!
You lose money and yield. You can buy a contract on currency rates, or buy bonds to hedge iirc.
Patience + Humility + Study = Success
  • #44
  • Aug 10, 2007 8:23am Aug 10, 2007 8:23am
Quoting Gmak
Point one. Monthlies

Recently witnessed the break to the upside of a long term triangle.

Current drop appears to be heading for a retest of said triangle. If triangle breaks to the downside, then possibility is bearish in medium term, however a break of the rising trendline at around 110 would be needed for confirmation of a long term change in trend.

The chart also shows numerous occasions in the last two years where the cross plummeted far more than what we have witnessed in the last week

Note in particular the giant pin bar in 2006, which (using elliot waves - which I hate to do) turned out to be the low of the three wave retrace of an earlier 5 wave push.

It nevertheless turned out to be just a retrace of the current long term trend.

Isn't your breakout a little too near the end of the triangle ? Maybe it's low probability signal?
  • #45
  • Aug 16, 2007 6:50am Aug 16, 2007 6:50am
Good day alll

Isn't a good day ???


+500 pips and the price didn't move yet

It's going to be a nice old story, End of cary trade

do you still remember our targets

Many thanks
  • #46
  • Aug 16, 2007 7:11am Aug 16, 2007 7:11am
Quoting Clusterwise
Good day all

If I am right, it's the end of cary trade

What do you think? Is it possible?

Yen is heading 109 then 101.69 by the end of October 2008

Many thanks

Fully agree with 109 now because we lost 115.

We moved these last 200 pips to 113 faster than I expected. 109, then that 101.70 if 109 is lost. Yes.

http://forexfactory.com/showpost.php...0&postcount=28 for the chart and
http://forexfactory.com/showpost.php...5&postcount=29
also hit that TL I posted now.
Trust price. Know yourself.
  • #47
  • Aug 16, 2007 7:34am Aug 16, 2007 7:34am
Looks to me like it's ending today.

There must have been a lot of positions unwound today. If they are all done then we will see some sideways move until a the next trend establishes itself.

G-Man
  • #48
  • Nov 21, 2007 4:13pm Nov 21, 2007 4:13pm
Quoting Clusterwise
Thanks Gmak for ur nice analyses

from my side

SELL 119.00 , ADD 120.25 ST= 122.50
TG= 116.50
TG2=109.00
TG3=101.69

there is a possibility of truncation , so when the price reach 109 we will monitor the movement of the price

good luck

Many thanks
Congratulation fellas

Second target hit

are you ready for the third one

Many thanks.
  • #49
  • Nov 21, 2007 4:26pm Nov 21, 2007 4:26pm
Be careful whose taking the other side of the sell positions. What I see is a break of a significant level and run down to get all of the retail traders in. Keep in mind, people looking at charts like this need retail traders to take the opposite side of their positions because they are trading on that scale.

Monthly wedge isn't broken until its broken. We're sitting on it.

http://img510.imageshack.us/img510/3278/uj112107xg3.gif
The basis of a democratic state is liberty. ~ Aristotle
  • #50
  • Nov 21, 2007 4:48pm Nov 21, 2007 4:48pm
I am very very bullish on yen. Anyone supports me Because american moentary policy is so stupid and they will lower IR and make bullshit on all markets. And also BOE will lower IR (they are in bigger shit then US economy) and Japan TOPIX lost 20% this year and japanese will have to do something. WAKE UP GOD DAMN!!!!!!
  • #51
  • Nov 21, 2007 4:53pm Nov 21, 2007 4:53pm
Yes, it always makes me nervous to see retail traders start agreeing on direction. It usually means the banks are making it look like a great opportunity and getting ready to pounce.
The basis of a democratic state is liberty. ~ Aristotle
  • #52
  • Nov 21, 2007 5:29pm Nov 21, 2007 5:29pm
Quoting mijamoto
I am very very bullish on yen. Anyone supports me Because american moentary policy is so stupid and they will lower IR and make bullshit on all markets. And also BOE will lower IR (they are in bigger shit then US economy) and Japan TOPIX lost 20% this year and japanese will have to do something. WAKE UP GOD DAMN!!!!!!
I agree bullish on the Yen, but BoE is not certain to cut rates any time soon. There are a number of possibilities driving the Yen strength, one of which is the move of foreign currency reserves out of China and middle-eastern countries into the Yen. Also Russia is selling a lot of natural gas to western europe and they might not want it all paid in USD.

We who look at the general economic picture might think that the BoE will have to reduce rates, but don't forget that they are not in a hurry to do anything. When the FED cut rates a few weeks ago, and were then joined by the ECB pumping billions of dollars and euros into the parched markets, the BoE sat quietly by and let everyone else do the fretting. Also the government is now nursing a fat bill for supporting Northern Rock and I don't know how that might affect things.

The BoE's primary target is to maintain domestic CPI in a band centred on 2% growth. CPI is an inflation measure which excludes some volatile things. At the moment 2% is on the radar for the next few months and rates will not come down until there is a significant risk of undershoot. Particularly the price of oil and other commodities has just hit the price of goods leaving the factory gate and that is going to ripple into CPI very soon. I believe the BoE will wait to see the effects of higher food and oil prices on CPI before making a move.
Minesweeper target: 284
  • #53
  • Nov 21, 2007 5:31pm Nov 21, 2007 5:31pm
You can be bullish with yen on USD/JPY but elsewhere it would be suicidal - at least for now
  • #54
  • Nov 21, 2007 5:52pm Nov 21, 2007 5:52pm
Why would the carry trade end? That's assuming that all the liquidity has dried up, which would be a foolish assumption. There are billions upon billions of dollars that are still sidelined and not actively playing a part in this market. Unless interest rate spreads evaporate there will be carry trade, plus it's also shortsighted to think of carry only in terms of the yen. Any pair with a significant interest rate differential is ripe for carry. Plus what fundamentals are there that are so great as to cause a complete market reversal in the attitude towards the Jpy? No matter how you cut it and slice it, 400 basis points is 400 basis points, and I've not even taken into account the 700 basis point spread on the NZD/JPY, etc. Unless people stop looking for yield there's going to be carry. Another thing that needs to be taken into account is that many hedge funds have a certain level of return they want to lock in by years end, months end, etc. and if one of their holdings is underperforming, say SIV/CDO, etc. then they will sell their profitable positions in order to make said return percentage, they will then wait out the yr, and pile back in later. I talked to quite a few people at funds and this is what i've been told, now I could be wrong, but that's just what i'm hearing. Anyone else?
Patience + Humility + Study = Success
  • #55
  • Nov 21, 2007 6:04pm Nov 21, 2007 6:04pm


I joined Clusterwise around 117 ;p

Still agree with him/her and the targets AND the risk of an abort/disruption/bounce at the monthly TL I posted.

Been over 8 weeks. I applaud Clusterwise

Trust price. Know yourself.
  • #56
  • Nov 21, 2007 6:11pm Nov 21, 2007 6:11pm
trend is sure down for all the carry trades.. but trends change :-)
  • #57
  • Nov 21, 2007 6:55pm Nov 21, 2007 6:55pm
I guess this is the beginning of a new trend.....

Just my nine cents..... http://www.kolobok.us/smiles/artists...C_thinking.gif
  • #58
  • Nov 22, 2007 2:09am Nov 22, 2007 2:09am
There has not been a new trend there for years , there is no reason to assume something is gonna change now
  • #59
  • Nov 22, 2007 5:45am Nov 22, 2007 5:45am
Quoting fx_amateur
There has not been a new trend there for years , there is no reason to assume something is gonna change now

Thanks for all comments.

by the way i don't care whether carry trade ends or not but it was matching the fall from the top 1590 pips and we have taken two third of that profit to our pockets.

all what we need to know if we are following the movement of the price, very simple

you buy ,you are predicting the price is going up and you sell ayou are predicting price is going

down.

One more advise, try not to trade in daily basis and you can taste the success.

Many thanks
  • #60
  • Nov 22, 2007 6:51am Nov 22, 2007 6:51am
there is still a big difference between rates in japan and the britain, eurozone and many other nations, so there will still be many players in the carry trades. Don't forget, most carry traders lose money.
0 traders viewing now