Best and Worst Forex and Commodity Performers In January (Seasonality)
Here are the currencies and commodities that do well or poorly in January, historically. Statistics include how often the prices rise or fall, and by how much, on average. Tickers mentioned: USD Index, USDCAD, USDCHF, EURUSD, Natural Gas (NG, UNG), Corn (ZC, CORN), Silver (SI, SLV), Wheat (ZW, WEAT). Also, check out the best-performing stocks in January.
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, AUDUSD, USDCAD, USDCHF, EURUSD, GBPUSD, USDJPY, USDMXN, NZDUSD for currencies and on Light Crude, Natural Gas, Corn, Gold, Silver, Copper, Coffee, Sugar, and Wheat for commodities. Applicable ETFs are also discussed.
Only the commodities and currencies on this list that tend to rise/fall in October more than 65% of the time (over the last 20 years) are discussed below. Other assets that are noteworthy but that don’t meet that 65% 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.
Forex Seasonality For January
The USD Index has risen in 14 of the last 20 years (70%), moving up by an average of 1.3% in January.
The PowerShares US Dollar Index Bullish Fund (UUP) has rallied in 5 of the last 9 years, gaining 1% on average during January.
The USDCAD has risen in 13 of the last 20 years (65%), moving up by an average of 0.9% in January.
The CurrencyShares Canadian Dollar Trust (FXC) has only rallied once in January in the last 10 years. In other words, it has fallen 90% of the time, and declines on average -1.8%.
The USDCHF has risen in 14 of the last 20 years (70%), moving up by an average of 1.2% in January.
The CurrencyShares Swiss FrancTrust (FXF) has fallen 60% of the time over the last 10 years, declining on average -0.2% in January.
The EURUSD has declined in 12 of the last 18 years (67%). The average decline in January is -1.4%
The CurrencyShares EuroTrust (FXE) has fallen 62% of the time over the last 13 years, declining on average -1.2% in January.
Commodity Seasonality For January
Natural Gas (NG) futures have declined in 13 of the last 20 years (65%), with an average drop in January of -4.5% making it the worst month of the year.
The United States Natural Gas Fund (UNG) has fallen 7 out of the last 9 years (78%), declining on average -3.7% in January.
Corn (ZC) futures have rallied in 13 of the last 20 years (65%), moving up an average of 0.9% in January.
Teucrium Corn Fund (CORN) has moved up 4 of the last 6 years (67%), averaging 0.4%.
Silver (SI) futures have rallied in 14 of the last 20 years (70%), moving up 3.3% in January on average. January and February are the best months of the year.
The iShares Silver Trust (SLV) has moved up 7 out of the last 10 years, averaging 5.3% in January.
Wheat (ZW) futures have fallen 12 of the last 20 years (60%). The average decline is 2%, making it the worst performing month of the year.
Teucrium Wheat Fund (WEAT) has dropped in 3 of the last 5 years (60%), with an average decline of 4.4%.
Final Word on Forex and Commodity Seasonality
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 may 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
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.