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The “Sell in May and Go Away” concept hasn’t been a real phenomena for the US S&P 500 in recent years.
Gold prices have been under pressure since the Federal Reserve’s policy meeting in June, and now is one of the finest times of the year for them.
Traders should be wary of the US Dollar’s gain due to dwindling US rate hike prospects at the start of the month, as well as adverse seasonality measures.
The start of the month calls for a look back at the seasonal trends that have influenced currency markets throughout the years. For July, we’ll be looking at the trailing 5-year and 10-year performance, which both fully capture trading during the era of quantitative easing and expanding government deficits since the 2008/2009 Global Financial Crisis, which is similar to the environment we’re in now as we recover from the coronavirus pandemic. Monthly Summary of Forex Seasonality for July 2021 Seasonality in the Euro (as measured by the EUR/USD) From a seasonality standpoint, July is a positive month for EUR/USD. It has been the greatest month of the year for the pair over the last five years, with an average gain of 1.31 percent. It has been the fifth greatest year in the last ten years, with an average gain of 0.15 percent. Seasonality in the British Pound (as measured by the GBP/USD exchange rate) From a seasonality standpoint, July is a somewhat positive month for GBP/USD. It has been the sixth best month of the year for the pair during the last five years, averaging a gain of +0.3 percent. It has been the fifth greatest month of the year during the last ten years, averaging a gain of 0.17 percent. Seasonality of the Japanese Yen (as measured by the USD/JPY) From a seasonality standpoint, July is a particularly bearish month for USD/JPY. It has been the fourth worst month of the year for the pair in the last five years, with a loss of -0.62 percent on average. It has been the worst month of the year over the past ten years, with an average loss of -0.86 percent. Seasonality in the Australian Dollar (as measured by the AUD/USD) From a seasonality standpoint, July is a particularly bullish month for the AUD/USD. It has been the second best month of the year for the pair during the last five years, averaging a gain of 1.45%. It has been the fourth greatest month of the year during the last ten years, averaging a gain of +0.40 percent. Seasonality of the New Zealand Dollar (through NZD/USD) in the Forex Market From a seasonality standpoint, July is a particularly bullish month for NZD/USD. It has been the fourth best month of the year for the pair during the last five years, averaging a gain of +0.89 percent. It has been the third greatest month of the year during the last ten years, averaging a gain of +0.91 percent. Seasonality of the Canadian Dollar (through USD/CAD) in the Forex Market From a seasonality standpoint, July is a particularly negative month for USD/CAD. It has been the third worst month of the year for the pair during the last five years, with a loss of -0.87 percent on average. It has been the third poorest month of the year during the last decade, with an average loss of -0.19%. Seasonality of the Swiss Franc (as measured by USD/CHF) From a seasonality standpoint, July is a little negative month for USD/CHF. It has been the pair’s ninth poorest month of the year during the last five years, with a loss of -0.32 percent on average. It has been the fifth poorest month of the year during the last decade, with an average loss of -0.14%. Forex Seasonality in the S&P 500 Index in the United States From a seasonality standpoint, July is a very bullish month for the US S&P 500. It has been the third greatest month of the year for the index during the last five years, with an average increase of 3.18 percent. It has been the third best month of the year during the last ten years, averaging a gain of 1.02 percent. “Sell in May and leave” hasn’t been a popular trend in recent years. Gold Forex Seasonality (through XAU/USD) From a seasonality standpoint, July is a very bullish month for gold (XAU/USD). It has been the fourth greatest month of the year for the precious metal in the last five years, with an average increase of 2.69 percent. It has been the third greatest month of the year during the last ten years, averaging a gain of +2.04 percent. —- Christopher Vecchio, CFA, Senior Currency Strategist wrote this article./n
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