The international capital movements continue to be driven by carry trade opportunities.
For hedging the debt ceiling event risk, traders like BRL, CNH, and JPY, where the first two provide the right beta to equities. While BRL provides a carry cushion, it is a bit more overvalued in some of our short-term models than CNH. The upside for CNH is likely viewed as...
Here we can see the end of a 5 wave pattern to the downside and the AB leg of the ABC correction complete.
So what does this mean?
Well we have still yet to put C in place, so simply we are targeting 35.75 for this corrective process. It's worth engaging in further topside exposure, especially if you are a believer of the bearish Yen story.
Best of luck...
The Safe Haven Currency may be at the end of its 11 month appreciation against TRY and MXN. Against the commodities currency of RUB, BRL and ZAR however JPY has depreciated. I categorize TRY and MXN as trading and high growth econmies for the past few years. Will there be a reversion?
