May forex seasonals: The strongest month for the Dollar Index

The month of April wraps up today and it was a volatile market, certainly not one that’s typically the strongest seasonally of the year.

Scorecard for April:

Typically the strongest of the year for cable (down 120 pips)Strongest month for the S&P 500 (down 2.9%)Copper seasonals strong (up 14.7%)Oil strong April-June (down 2.1%, though was stronger until this week)Strongest month for AUD/USD (flat) and AUD/JPY (up 360 pips)Second-best month for EUR/USD (down 90 pips)Second-best month for Shanghai Comp (up 2%)

The takeaway here is the that China-related trades did well, along with betting on the ongoing yen decline. Dollar trades and risks traders were wounded by stubbornly high inflation and the way that goes will go a along way towards determining what happens in May. That said, seasonals are nearly as positive in the upcoming month.

Numbers since 2000 for May:

Strongest month for the Dollar IndexWeakest month for EUR/USDSecond-worst month for AUD/USD and AUD/JPYAUD/CAD is particularly weak, softest month by farSecond-strongest month for copperStrongest month for oil, though probably skewed by the massive percentage gain (+88%) in May 2020Breaking it down, the first week of May is generally the strongest for stocks while the second week is the weakest

This article was written by Adam Button at www.forexlive.com.