March forex seasonals: Tailwinds continue to blow on several fronts


Over the long term, some alpha will be generated with the help of seasonals, but February also served as a reminder that momentum and fundamentals come first. At the beginning of the month, I warned that February was the worst month of the year for Nasdaq. This was not helpful as the AI ​​boom continued and NQ rose 5.1%.

The other seasonal trades I highlighted performed better.

Oil followed the seasonal trend (which continued through June) to rise, and Chinese stocks rebounded as predicted by February seasonal data, leaving an interesting-looking candle on the Shanghai Composite monthly chart.

Shanghai Comp monthly

Cable also followed the seasonal pattern with a moderate loss, while the Australian dollar and copper failed to benefit from the seasonal headwind (although it continued to blow throughout March and April).

Positive seasonality continues in Chinese stocks in March and April. In fact, most stock markets have a positive backdrop for March, and the numbers would have been better had it not been for the decline in March 2020. The brightest day really comes in April, which is the strongest seasonal month of the year for the S&P 500 and MSCI. World Index.

On the FX front, March is the second strongest month for USD/JPY, but in light of BOJ’s Takata comments, I think I’ll focus more on fundamentals.

The euro is showing some positive trends both against the US dollar and crosses.

While not a seasonal month overall, some of the shine of 2020 has been removed by Covid-19. Real trade may be poised to strengthen in April, which could coincide with signs of stronger central bank easing.

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