07.08.2023 – Is there really such a thing as seasonal patterns in Forex trading? We found an author who says there is. And he advises to keep an eye on the Australian dollar in August. We’ll abstain from an opinion and briefly summarize the thesis.
If Don Dawson of the financial website “Barchart.com” has his way, we are in the middle of a very interesting phase for the Aussie. He just wrote “Stop Wasting Time And Start Comprehending The Australian Dollars Seasonal Trading Pattern In August.” Dawson believes that if the weekly chart breaks below the May 31 low, it will support the “August seasonal sell pattern”. Here is the weekly chart of AUDUSD.
Source: Bernstein Bank GmbH
The Moore Research Center found that AUD traditionally tends to weaken before the end of Australia’s first fiscal quarter on Sept. 30 – over 15 years, this pattern has produced gains 87 percent of the time. On August 24, for example, the Aussie had closed below its August 04 level in 13 of the past 15 years. Of course, this past pattern does not guarantee success in the future, the author qualified.
Will spring bring a bull market?
Improved economic data can only be expected in Australia from September onwards – because that is when spring begins, which has a positive effect on the job market, growth in gross domestic product and business surveys. Dawson’s thesis: “Longer daylight hours and warmer weather often stimulate economic growth.” Of course, commodity prices are also important for the performance of the foreign exchange – as the country continent exports iron ore, gold or coal.
Looking at monetary policy
Dawson went on to say that the market could be oversold at the moment and need a rally to provide a better entry point for the short trade. He added that this is also due to monetary policy. He said the Reserve Bank of Australia (RBA) has just delayed reaching its inflation target of 2 to 3 percent until late 2025. This has supported the Aussie.
However, the market had expected an interest rate step of 25 basis points – but for the second time in a row, the RBA paused. First, the central bank wanted to analyze the effect of earlier interest rate steps. In the end, hawkish and dovish comments balanced each other out – “which may assist our upcoming seasonal sell in the AUD.”
We are curious to see how the predicted seasonal sell develops – and wish successful trades and investments!
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