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Carrytrade

The Swiss franc *might* go lower, but only so farThe Swiss Franc has always been one of my favourite currencies to trade because it abides by support and resistance lines... except when the SNB intervenes.... ouch that one hurt. In any case, what you are seeing here are arrows point up from very strong resistance lines stretching back several months. The A arrow points up from the weakest support, the second arrow points up from declining support and the I arrow points up from monthly support. Either way, the USDCHF will bounce up from one of these lines, though as a caveat, a break below and I'd be closing off all your CHF positions. RSI and CCI are overbought, a confirmation from the MACD would confirm buying opportunity. Selling CHF also pays overnight premium.
Long
by maccabean
Potential For a Bullish Monthly TrendThe Chart shows the current wave count on NZDUSD. The Wave Count indicates the cycle from Jan 20 lows at 6350 has already completed a few days ago at 6748. At this point there is no proof that the structure turns into a double corrective and we get a renewed leg to the upside, that will only happen on a bullish breach of 6748. The reason the chart is posted, after todays strong momentum to the upside, this could be an area to start initiating a first position, perhaps small, and then looking to add once the double structure is confirmed. There is a bias in this chart (if you've seen some of my other charts) as I'm extremely bearish the USD. Which is the reason why I believe we will have an uptrend in the NZDUSD that is likely to last a few months. Please see the related charts to understand why I'm bearish USD. When the USD is bearish, traders are drawn to the kiwi because of it's attractive carry rate. A breach of B wave lows at 6563 invalidates the setup. Targets will be determined as the wave develops with a min target of 6900. Best entry would be by buy stop above today's highs as momentum has slowed down.
Long
by JigneshDavda
4
Dollar Futures point to UpsideThe ceiling of 100 has been a historically stubborn level. But looking at the same level on a longer horizon also shows the explosion of dollar strength above 100. The market only expects two rate hikes in 2016 despite the Fed dot plot estimating four. The market has not begun to factor in additional moves and other fundamental features that are dollar positive (carry trade). Pushing through 100 may prove to be difficult but the squeeze afterward is the money maker.
DLong
by Burdman
Breakout: EURUSD new carry tradeWith the technical validation of the fundamental environment, it appears the new range for EURUSD is 1.08 to 1.055 The continuous slide of USDJPY without follow-through in the dollar lends itself to the conclusion of winding down long positions in USDJPY lacking the apparent short in dollar alone. The prevailing rhetoric is "safe haven" seeking, that leads to the appreciation of yen, with a flight from risk evident in mainland Asian markets. I believe the movement in pair is more likely removing profitable trades while the underlying factors affecting carry trades do not reflect a further return on investment. The opposite exists in EURUSD: the headlines can describe policy divergence better than this post. However, less covered is the future value of the carry trade as a product of central bank policy. Policy (carry) favors short EURUSD in addition to the bearish sentiment enveloping the pair. If this assumption stands, the pair will be subject to a somewhat wide, but defined, range. A short term reversal at 1.075 allows additional short entry opportunity at: 1.0780, 1.08, 1.0830. This is likely to be a very short term correction in order to define the trough of the range.
Short
by Burdman
EURAUD: Ideal opportunity for a pair tradeAfter seeing The Working Trader's idea I figured I could attemp a pair trade in this pair, to take advantage of the interest rate differential in both EURUSD short and AUDUSD long. The entry will be a market order, but I'd have to see how the markets open tomorrow, I will update the chart by then. For now, keep in mind that for pair trades, I aim to open a big position on each side, which thanks to the pair trade's more 'market neutral' stance, lets me use no stop loss and be somewhat safe, at least, as long as the ratio chart's setup is valid (in this case EURAUD). The advantages are multiple, check out The Working Trader's post in 'related ideas' for more information, I detailed it there. For now, if you want to enter this trade, find out the ADR value (atr of 1,5,10 and 20 bars added together and divided by 4). Once you know this you can calculate position size in base on your desired risk, per day. You will have to watch the trade, unless you're deep in profit, it won't be a set and forget deal. Good luck, and wait for the update regarding entry tomorrow. Target is initially the time at mode one, but it can retrace the whole terminal wedge (it should for it to be valid, and it has to occur in 1/3-1/4 the time it took to be formed). Cheers, Ivan.
Short
by IvanLabrie
11
FXY: How long can the Yen carry trade last?There's a monthly time at mode expiration in this instrument coming next month. It's possible to see a reaction as carry trades get unwound, but it's not clear at what price yet. The extreme target is not reached, but the time at mode one has been exceeded, and heading for 2x the projected range soon. I think the dollar rally is about to hit its expiration date, regarding the Euro and the Yen at least, but it can last at least one more month. Looking at usdjpy closely, and also monitoring the S&P500, TLT, Dax, Nikkei and gold. These are very interesting times to be a trader! Will update with more insights and potential trade setups as they come. Good luck, Ivan.
AMEX:FXY
by IvanLabrie
5