Forex Seasonality – September 2024: Bullish Tendency for EUR/USD, Bearish Potential for GBP/USD and USD/JPY

September Forex Seasonality Key Points

• European currencies have seen mixed performance in September, with EUR/USD seeing its second-most bullish month and GBP/USD seeing its second-worst returns
• USD/JPY remains in the midst of a bearish seasonal period
• AUD/USD may pull back from resistance in the upper-0.600s if its bearish historical tendency holds

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. Please note that past performance is not necessarily indicative of future results.

Historically, September has been the second most bullish month for EUR/USD, with an average return of +0.63% across the month over the last 50+ years. A strong month in August (contrary to the usual seasonal headwind) had some traders eyeing a potential breakout for the world’s most widely-traded currency pair, but the late fade leaves the pair mostly flat within the year-to-date range between 1.05 and 1.12. Traders will be hoping for continued volatility, in either direction, to inject some excitement into the pair

British Pound Forex Seasonality – GBP/USD

Chart Source: TradingView, StoneX. Please note that past performance is not necessarily indicative of future results.

Looking at the above chart, GBP/USD has historically seen its second-weakest performance in August, with average returns of around -0.37% since 1971. Cable already bucked its bearish seasonality last month, the key question as we move through September will be whether the pair fades off its 2.5-year high near 1.31, or if it can keep powering higher from here.

Japanese Yen Forex Seasonality – USD/JPY

Chart Source: TradingView, StoneX. Please note that past performance is not necessarily indicative of future results.

August has historically been a bearish month for USD/JPY, with the pair falling by an average of -0.17% in August since the Bretton Woods agreement. That said, this average return has been middle of the pack with USD/JPY falling in most months in the sample we track. As the chart above shows, the pair remains in the middle of its historically bearish entire late-summer/early fall window from June-October, and with the BOJ expected to be one of the only major central banks tightening monetary policy in the latter half of the year, a (continued) run of yen strength wouldn’t be surprising.

Australian Dollar Forex Seasonality – AUD/USD

Chart Source: TradingView, StoneX. Please note that past performance is not necessarily indicative of future results.

Turning our attention Down Under, AUD/USD has seen historically bearish returns in August, with an average decline of -0.33% across the month, its third-worst return of all months. Taking a look at the AUD/USD chart, prices have nudged up toward the top of their recent range in the upper 0.6000s, so a decline this month would likely only take rates back to the middle of their established range.

Canadian Dollar Forex Seasonality – USD/CAD

Chart Source: TradingView, StoneX. Please note that past performance is not necessarily indicative of future results.

Last but not least, August has been a relatively flat month for USD/CAD going back to 1971, with an average historical return of +0.05%. The North American pair saw a big drop last month, leaving rates near 6-month lows after testing 4+ year highs earlier in August. Bulls will be hoping for a bullish seasonal tailwind to take rates back toward those significant highs in the 1.3800-1.3900 zone.

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

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.