Monthly Forex Seasonality – August 2022: Gold, US Stocks Trend to Outperform – DailyFX | Omd Cialis

August FX season overview:

  • That eighth month of the year usually sees mixed performance from the US dollar.
  • The Japanese yen and Swiss franc tend to do well in August, while the Australian and New Zealand dollars fare poorly.
  • August was a good month for both gold prices and US stocks.

The start of the month warrants a look back at the seasonal patterns that have impacted FX markets over the past several years. To the August, our focus is on 5-year and 10-year trailing performance, both of which capture trading during the unwinding of aggressive central bank interventions beginning with the 2008/2009 global financial crisis – not dissimilar to the environment we find ourselves in now.

Still, as in the last five months, persistent ahistorical conditions reduce the reliability of using seasonality as a meaningful indicator of price action. Finally, global commodity markets remain stretched amid Russia’s ongoing invasion of Ukraine, and global supply chains are still grappling with China’s zero-COVID strategy. We must conclude that strategies based on seasonal tendencies remain less viable than in past years.

Monthly Summary of Forex Seasonality – August 2022

Forex seasonality in Euro (above EUR/USD)

Monthly Forex Seasonality - August 2022: Gold, US stocks tend to outperform

August is a mixed Month for EUR/USD from a seasonal perspective. Over the past 5 years, it was the fifth-worst month of the year for the pair, with an average loss of -0.04%. In the last 10 years, it was the 5th best month of the year with an average gain of +0.14%.

Forex Seasonality in British Pounds (via GBP/USD)

Monthly Forex Seasonality - August 2022: Gold, US stocks tend to outperform

August is a bearish month for British pound/USD, from a seasonal perspective. Over the past 5 years, it was the fourth-worst month of the year for the pair, with an average loss of -0.46%. In the last 10 years, it was the third worst month of the year with an average loss of -0.33%.

Forex Seasonality in Japanese Yen (via USD/JPY)

Monthly Forex Seasonality - August 2022: Gold, US stocks tend to outperform

August isa bearish month to the USD/JPYfrom a seasonal point of view. Over the past 5 years, it was the fifth-worst month of the year for the pair, with an average loss of -0.59%. In the last 10 years, it was the fifth worst month of the year with an average loss of -0.19%.

Forex Seasonality in Australian Dollars (above AUD/USD)

Monthly Forex Seasonality - August 2022: Gold, US stocks tend to outperform

August is a bearish month for EUR/USD, from a seasonal perspective. Over the past 5 years, it was the fourth-worst month of the year for the pair, with an average loss of -0.52%. In the last 10 years, it was the third worst month of the year with an average loss of -0.85%.

Forex Seasonality in New Zealand Dollars (via NZD/USD)

Monthly Forex Seasonality - August 2022: Gold, US stocks tend to outperform

August isa bearish month for CHF/USD, from a seasonal perspective. Over the past 5 years, it was the second-worst month of the year for the pair, with an average loss of -1.65%. In the last 10 years, it was the second worst month of the year with an average loss of -1.69%.

Forex Seasonality in Canadian Dollars (via USD/CAD)

Monthly Forex Seasonality - August 2022: Gold, US stocks tend to outperform

August is a mixed month for USD/CADfrom a seasonal point of view. Over the past 5 years, it was the sixth-best month of the year for the pair, with an average loss of -0.08%. In the last 10 years, it was the fifth worst month of the year with an average return of +0.11%.

Forex seasonality in Swiss francs (above USD/CHF)

Monthly Forex Seasonality - August 2022: Gold, US stocks tend to outperform

August is a bearish month for USD/CHFfrom a seasonal point of view. Over the past 5 years, it was the fourth-worst month of the year for the pair, with an average loss of -0.67%. In the last 10 years, it was the fifth worst month of the year with an average loss of -0.26%.

Forex seasonality in the US S&P 500

Monthly Forex Seasonality - August 2022: Gold, US stocks tend to outperform

August isa bullish month to the the US S&P 500from a seasonal point of view. Over the past 5 years, it was the sixth best month of the year for the index with an average gain of +2.24%. In the last 10 years, it was the fifth worst month of the year with an average return of +0.74%.

Forex Seasonality in Gold (above XAU/USD)

Monthly Forex Seasonality - August 2022: Gold, US stocks tend to outperform

August is a bullish month for Gold (XAU/USD)from a seasonal point of view. Over the past 5 years, it has been the 6th best month of the year for the precious metal with an average return of +1.86%. In the last 10 years, it was the second best month of the year with an average gain of +2.02%.

— Written by Christopher Vecchio, CFA, Senior Strategist

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