Home > Forex and Commodity Futures Seasonality For May

Forex and Commodity Futures Seasonality For May

Seasonality is how a specific asset performs at certain times of the year. Here are the historical tendencies for forex pairs and commodities in the month of May. Statistics include how often the prices rise or fall, and by how much, on average. $AUDUSD $GBPUSD $USDJPY $EURUSD $SI_F

Statistics are based on monthly opening and closings prices, and do no reflect overall volatility that occurs during the month. Commodity statistics are based on a continuous futures contract, which may differ from specific contract statistics.

Statistics are run on USD Index, USDAUD, USDCAD, USDCHF, USDEUR, USDGBP, USDJPY, USDMXN, USDNZD (some of these pairs are flipped relative to how they are typically quoted, be aware of that) for currencies and on light crude, natural gas, corn, gold, silver, copper, coffee, sugar and wheat for commodities. Only the commodities and currencies on this list that tend to rise in May more than 68% of the time (over the last 20 years) are discussed below. Other assets that are noteworthy, but don’t meet that 68% threshold may also be discussed. Applicable ETFs are also mentioned.

Seasonality statistics are best utilized in conjunction with strategies that provide exact entry, exit and risk management protocols. For examples of such strategies, see the Forex Strategies Guide For Day and Swing Traders.  If more interested in stocks, see 15 Strong Seasonality Stock Trades for May.

Forex Seasonality For May

All statistics are based on the last 19 years of data, unless stated otherwise.

USDGBP: The USD has risen against the GBP in 15 out of the last 19 years (79%). The average gain for the USD (or loss for the GBP)–including up and down years– is 0.7%. This would indicate the GBPUSD forex pair could be under downward pressure in May.

The British Pound ETF (FXB) has finished lower in 10 of the last 11 years (rising only 10% of the time), losing -0.8% on average.

USDAUD: The USD has risen against the AUD in 14 out of the last 19 years (74%). The average gain for the USD (or loss for the AUD) is 1.6%. This would indicate the AUDUSD forex pair could be under downward pressure in May.

The Australian Dollar ETF (FXA) has finished lower in 8 of the last 11 years (rising only 30% of the time), losing -2.1% on average.

USDJPY: The USD has risen against the JPY in 13 out of the last 19 years (68%). The average gain for the USD (loss for JPY) is 1.6%. This would indicate the USDJPY forex pair could see upward pressure in May.

The Japanese Yen ETF (FXY) has finished lower in 6 of the last 10 years (rising only 40% of the time), losing -0.6% on average.

USDEUR: The USD has risen against the EUR in 12 out of the last 18 years (67%). The average gain for the USD (loss for EUR) is 1%. This would indicate the EURUSD forex pair could be under downward pressure in May.

The Euro ETF (FXE) has finished lower in 10 of the last 14 years (rising only 29% of the time), losing -1.2% on average.

Commodity Futures Seasonality For May

Silver is worth noting, as May is historically the worst month of the year. Silver has fallen in May 12 out of the last 19 years (63%) [or rallied only 37% of the time]. The average decline for silver during the month is -2.3%.

silver seasonality chart
Courtesy of StockCharts.com

The Silver ETF (SLV) has finished lower in 8 of the last 11 years, dropping -2.8% on average.

Final Word on Forex and Commodity Seasonality

This is the raw data. What you do with it is up to you. All traders are encouraged to do their own research and apply their own strategies if utilizing these statistics.

Apply other technical and fundamental metrics to help zero-in on exact entry and exit points. Seasonality is not covered in my stock or forex trading course because it is a not a requirement for successful trading. That said, it is an additional tool you can use.

Losing trades WILL happen. Don’t risk more than 1% (or 2%) of your trading account on a trade (risk = difference between entry price and stop loss price, multiplied by the number of shares). There is always a risk in trading, and you can lose much more than you expect (even when you think you are only risking 1%).

By Cory Mitchell, CMT

Follow me on Twitter @corymitc and check out our Facebook page.

 

Disclaimer: This article should not be viewed as investment advice, and is not a recommendation for you to buy or sell. Past performance is not necessarily indicative of future performance.