Forex Seasonality – April 2024: GBP/USD’s Most Bullish Month, USD/CAD’s Most Bearish

April Forex Seasonality Key Points

GBP/USD has historically seen its strongest gains in April.
USD/JPY tends to fall in April, and with rates testing 34-year highs and Japanese policymakers considering intervention, seasonality and policy risks point to the downside.
USD/CAD, by far, has seen its worst performance in April and is testing resistance at its 4-month highs near 1.3600.

The beginning of a new month marks a good opportunity to review the seasonal patterns that have influenced the forex market over the 50+ years since the Bretton Woods system was dismantled in 1971, ushering in the modern foreign exchange market.

As always, these seasonal tendencies are just historical averages, and any individual month or year may vary from the historic average, so it’s important to complement these seasonal leans with alternative forms of analysis to create a long-term successful trading strategy.

Euro Forex Seasonality – EUR/USD Chart

Source: TradingView, StoneX

Historically, April has been a bullish month for EUR/USD, with an average return of 0.34% over the last 50+ years. With the world’s most widely-traded currency pair tracking toward an essentially unchanged March, after an essentially flat February, FX traders will be hoping that volatility picks up in one direction or another!

British Pound Forex Seasonality – GBP/USD Chart

Source: TradingView, StoneX

Looking at the above chart, GBP/USD has historically seen its strongest bullish performance of any month in April, with average returns in excess of 0.6% since 1971. Through the first three months of the year, GBP/USD has been following its historical seasonality to a “T”, with losses in January and February and March tracking toward a roughly flat month, so this will be a key pair to watch in the coming month.

Japanese Yen Forex Seasonality – USD/JPY Chart

Source: TradingView, StoneX

USD/JPY’s strong start to 2024 carried over through March, though if the historical tendency tracks through April, the pair could see a pullback in the coming weeks. Notably, USD/JPY is testing its 34-year high near 152.00 as of writing, and Japanese policymakers appear poised to intervene directly into the market to strengthen the yen (likely pushing USD/JPY lower) if it rises much further. This alignment of fundamental policy goals and bearish seasonality strengthens the likelihood of a USD/JPY drop in April.

Australian Dollar Forex Seasonality – AUD/USD Chart

Source: TradingView, StoneX

The Australian dollar is another currency pair that is tracking its long-term seasonality closely so far in 2024. The pair fell in both January and February and as of writing, is on track to finish March near unchanged. With that as the backdrop, April has historically been the second most bullish month for AUD/USD, with average returns of 0.38% since 1971.

Canadian Dollar Forex Seasonality – USD/CAD Chart

Source: TradingView, StoneX

Well, there’s a standout! Going back to 1971, April has been by far the most bearish month for USD/CAD, with the pair showing an average loss of more than -0.5% over that period. As of writing, USD/AD is probing its highest levels since last November near 1.3600, so it will be interesting to see if that resistance level caps rates over the next month.

As always, we want to close this article by reminding readers that seasonal tendencies are not gospel – even if they’ve tracked relatively closely so far this year – so it’s important to complement this analysis with an examination of the current fundamental and technical backdrops for the major currency pairs.

-- Written by Matt Weller, Global Head of Research

Follow Matt on Twitter: @MWellerFX

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.