IvanLabrie
Long

FXE and FXY: Carry trade unwind triggers longterm rally

AMEX:FXY   CURRENCYSHARES JAPANESE YEN TRUST
a year ago
In my previous FXY             chart, I detailed the weekly/monthly time at mode trend signals and with Tim West's help I noticed that the downtrend was expiring during August.
After seeing the reaction to this event, I conclude that both FXE             and FXY             are reversing the longterm downtrend, judging by post pattern behavior after forming a clear bottom.

This currently eludes traditional Elliott Wave analysts (save for a select few like our local AndyM who did a great job with his analysis). I recently began studying neowave from Glenn Neely's book, and read his updates on the new chart patterns he discovered in the 90s, and the one that concluded the impulsive tops/bottoms in most major instruments is a diametric corrective structure. A 7 wave pattern, with similar time between swings and an expanding/contracting or contracting/expanding price range during its progression.

Time at mode forewarned us of this situation, and it's now confirmed based on the last week and this week's behavior that the trend is done for.
I estimate a return to the monthly mode as a safe bet target for these instruments, which would be an impressive rally in the euro             and yen, so, I'll be looking for opportunities on the long side on both.
Gold             is unclear to me yet, but it's possible that the impulse that we recently saw was the beginning of a new uptrend as well, just that it has a complex bottom formation, which I haven't analyzed in this light in the proper depth required yet. (proper Elliott Wave analysis is really time consuming, and not too practical for trading, but I like keeping it as a secondary tool)

I guess that you could purchase calls or sell puts to profit from these instruments reversal, or trade the Forex pairs with leverage as well.
Good luck, and see you at the top.
Cheers,
Ivan.
11 months ago
Comment: Looks solid. Some more upside for these two.
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