Forex Seasonality – June 2024: Potential for EUR/USD and AUD/USD Rallies, USD/CAD Drop

June Forex Seasonality Key Points

• June has historically been the 3^rd-best month of the year for EUR/USD and AUD/USD.
• GBP/USD has fallen -0.3% in June since 1971 – will we see a pullback this year?
• USD/JPY has seen small average moves in June since Bretton Woods, but intramonth volatility can still be notable as we saw in May.

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. In other words, past performance is not indicative of future results.

Euro Forex Seasonality – EUR/USD Chart

Source: TradingView, StoneX

Historically, June has been a bullish month for EUR/USD, with an average return of +0.52% across the month over the last 50+ years. After a strong month of May (+1.52% as of writing, the strongest of 2024 so far), EUR/USD bulls will be hoping the world’s most widely-traded currency pair can build on its gains heading into the summer.

British Pound Forex Seasonality – GBP/USD Chart

Source: TradingView, StoneX

Looking at the above chart, GBP/USD has historically seen negative performance in June, with average returns of around -0.3% since 1971. Cable did manage to buck May’s seasonal tendency for weakness by rising over the last month, but given the pair’s tendency to generally underperform through the summer, some traders will be looking at the May rally with skepticism.

Japanese Yen Forex Seasonality – USD/JPY Chart

Source: TradingView, StoneX

June has historically been a quiet month for USD/JPY, with the pair showing its 2^nd-smallest average movement (-0.10%) since the Bretton Woods agreement. Of course, it’s worth noting that these moves only highlight the beginning-to-end net movement in a currency pair, potentially masking the intra-month volatility; we saw this exact dynamic play out in May, where USD/JPY is set to close down less than -1% but saw a 600-pip swoon on BOJ intervention in the interim.

Australian Dollar Forex Seasonality – AUD/USD Chart

Source: TradingView, StoneX

Turning our attention Down Under, AUD/USD has historically seen its 3^rd-best performance in June, rising by an average of 0.14% in the month over the last 50+ years. AUD/USD shrugged off its general tendency to fall in May this year, gaining about +2.5% as of writing for the best month of 2024 so far. AUD/USD bulls will be looking for a definitive break above 0.6650 to set the stage for more gains toward 0.6900 resistance next.

Canadian Dollar Forex Seasonality – USD/CAD Chart

Source: TradingView, StoneX

Last but not least, June has been the 2^nd worst month for USD/CAD going back to 1971, with an average historically return of -0.06%. Of course, May’s seasonal track record was far worse, and USD/CAD managed to weather the storm relatively well this year, so all is not lost for loonie bears. USD/CAD’s key level to watch early in June will be at previous-resistance-turned-support near 1.3600.

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

Check out Matt’s Daily Market Update videos on YouTube and be sure to follow Matt on Twitter: @MWellerFX