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Seasonality in USD/JPY
By DailyFX Updates | July 17, 2007
In today’s Daily Fundamentals, I wrote about the seasonality effect on USD/JPY. Seasonality is one of the purest ways to observe price beahvior. Based upon some historical price patterns, we found that USD/JPY rallies 9 out of the past 10 years. Part of this may be due to the fact that Japan’s second Q begins in July which is the same time when the US begins its second half.
July is the strongest case of seasonality that we have found in the currency pair, but the behavior of the currency in August is also worth noting:
In 8 out of the last 10 years, we saw USD/JPY fall in August. In fact, if you looked at all of the Yen crosses, August is their worst performing month.
What does this tell us? Look for opportunities to buy USD/JPY in July and opportunities to sell the carry currencies in August.
Tags: dollar, forex, forex news, forex trading
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