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#171 (permalink)

08-28-2008, 12:53 PM

John Kicklighter John Kicklighter is offline

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I was taking a look at our carry trade numbers today as a number of the yen and swiss crosses were pulling lower. Lo and behold, what do I see? Our Index has pushed to new 6-month lows and a significant trend is now being tested.

Should this rising trend give, I would expect to see carry liquidation pick up until we hit the next major swing low; and depending on where support levels are across the market for these aforementioned currencies, it could simply accelerate into its losses instead of holding at support.

I'm thinking about whether I should apply this carry basket drop as a leading indicator for a USDJPY bearish break. Anyone agree or disagree?

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John Kicklighter is the author of Dynamic Carry Trade Basket, Watch What The Fed Watches, and Forex Trading Weekly Forecast on DailyFX.com

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