The Carry Trade: Buy or Sell? - Page 8 - DailyFX Forex Forum

Terri Belkas · #**106** (**permalink**) 01-21-2008, 03:21 AM

Carry trades remain very heavy, as European stocks are following Asian equities dowwwwn. Right now, the JPY pairs appears to be finding some support, though it won't take much for them to break sharply lower. Trying to go long these pairs is like attempting to catch a falling knife...

millionlink · #**107** (**permalink**) 02-03-2008, 01:08 AM

thank you for your topoic. I want to learn more

Terri Belkas · #**108** (**permalink**) 02-04-2008, 05:25 AM

We've seen the high-yielding comm dollars continue to rally quite a bit, but I think there's a chance we could see AUD pull back against the EUR and USD in the near term, especially if the RBA hikes but issues fairly neutral commentary. Looking at EURAUD in particular, the pair is testing support at the 50% retracement level of 1.5491-1.7159 at 1.6325 while the 200 SMA at 1.6283 looms below there.

Frederick · #**109** (**permalink**) 02-06-2008, 10:26 AM

Good thread here. Good feelings are gone now, stock markets are not able to recover even after Ben cuts rates. Optimism is gone, will this be the start of the end of Carry Trades ?

Terri Belkas · #**110** (**permalink**) 02-07-2008, 01:51 AM

Quote:

Originally Posted by Frederick

Good thread here. Good feelings are gone now, stock markets are not able to recover even after Ben cuts rates. Optimism is gone, will this be the start of the end of Carry Trades ?

I don't think there will ever be a true 'end of the carry trade', but I do think we may be at a point where you can't just arbitrarily choose to buy a high yielder against a low yielder and expect to make a ton of money off of it. Traders are not as willing to take on risk, which we're seeing reflected in the equity markets (as you mentioned).

Looking back at EURAUD (which I mentioned the other day), the pair has managed to hold above support at the 50% fib of 1.5493 - 1.7160 at 1.6329 and the 200 SMA at 1.6281.

Frederick · #**111** (**permalink**) 02-07-2008, 12:08 PM

Thank you for your reply. I am still bullish on the NZD/JPY pair. I think I may buy a lot of NZD using JPY and and put into NZD Term Deposits for a very long term.

Frederick · #**112** (**permalink**) 02-12-2008, 09:47 PM

I am reinforcing my earlier posting in the above. With the latest news on the subprime fiasco about to 'hammer Japan' now, it will be natural for the Yen to weaken further.

Agreed ?

sandyshores · #**113** (**permalink**) 03-13-2008, 09:49 AM

While I think Ive got the basics of the carry trade down, Im a bit unsure of how most of you are approaching the carry trade as an investment. Im assuming that most of you are paired to the Yen in some fashion so as to capitalize on the interest rate differential, and then holding(carrying) the trade overnight to make money on the interest? Is this correct?

Im hoping to enter into trade on the NZD/JPY pair while going both long and short at the same time, either through one broker, or with 2, and then just holding the trade overnight to make money off the interest. Can anyone offer any thoughts on this? much thanks
Steve

Frederick · #**114** (**permalink**) 03-13-2008, 02:15 PM

You'll have to be aware of the exchange rate between the NZD and the JPY (which is a cross). The JPY may go so strong that you may get margin calls.

So, have a lot of buffer to withstand the thing going down the NZD/JPY = 40.

sandyshores · #**115** (**permalink**) 03-15-2008, 09:41 PM

HI Fredrick,
Thanks for the reply. It's always interesting to see others posts as well and like the fact that you are also following this pair. I wanted to say that I dont quite follow your last sentence about it going down to 40? Also, I wanted to ask what broker you recommend. I just downloaded the FXCM software to find that they dont offer the NZD/JPY pair.
Steve

Frederick · #**116** (**permalink**) 03-17-2008, 04:08 PM

Hi Steve, well, I said 40 because historically, the lowest level the NZD/JPY has ever dropped to was 40. So, if I am to cushion myself when I participate in the Carry Trade, I must prepare myself for a drop of up to 40.

There is definitely the NZD/JPY pair in FXCM. You need to go to your settings screen to find the pair, and then reinstate this pair into the table of pairs on the top left hand corner.

Try it,.......

lovelyforex · #**117** (**permalink**) 03-30-2008, 10:17 AM

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Frederick · #**118** (**permalink**) 03-30-2008, 10:09 PM

Quite keen here. Can you put a forward date for me to try-out your trading techniques please ?

lovelyforex · #**119** (**permalink**) 03-30-2008, 10:20 PM

hi frederick

pls email me..i cannot post here..

kerrygarlic · #**120** (**permalink**) 05-07-2008, 10:30 PM

Quote:

Originally Posted by Antonio Sousa

Yen Carry trade Positioning

The ratio of long to short positions in the USDJPY stands at 1.84 as nearly 65% of traders are long. Yesterday, the ratio was at 2.10 as 68% of open positions were long. In detail, long positions are 5.0% lower than yesterday and 25.2% stronger since last week. Short positions are 8.2% higher than yesterday and 16.2% weaker since last week. Open interest is 0.7% weaker than yesterday and 8.6% above its monthly average. The SSI is a contrarian indicator and signals more USDJPY losses.

Source: FXCM Execution Desk

For historical data and the latest charts based on the SSI please visit http://www.dailyfx.com/story/strateg...903946044.html

For information on an FXCM Managed Fund that takes advantage of the SSI, please review our Sentiment Fund at: http://www.fxcmmanagedfunds.com/ or call +1 646-432-2968.

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