SEASONALITY in GBPUSD. This is not the GBP trade-weighted currency itself, but only the GBPUSD pair. So, the result will be different than the GBP TWI.
This is the 39th Year that GBPUSD normally goes up every April.
This is due to the following:
Seasonality
(1) End/Start of the UK tax year.
(2) Heavy month of dividend payments (repatriation) by U.K. companies. Income/dividends from commodity-based FDI investments.
Anything that will affect the above can through of this pattern.
For example:
In the year 2000, we were having a dot com burst!
In 2004, Tony Blair announces a change in government policy: A referendum would take place. Certainly, this would throw off the pattern.
In 2008, there was a financial crisis. Ah, and the UK pattern was flat, it foreshadowed bad things to come.
In 1984, the there were mass shootings, miners strikes and the government had budget problems that month.
Those were the only three times that the pound fell. Eight times out of the thirty-eight times, the pound was flat and/or did not rise up that much; however, the rest were positive and brought in more than 200 to 300 pips; sometimes 600 to 800 pips. If only looking back 10 year, then 99% of the time going back 10 years, there is a rise in the pound; however, if one looks back for 38 years, then 71% of the time, in April every year, there is a rise in the GBPUSD.
This is not the TWI, but only GBPUSD. Possibly the TWI always rose 100% of the time.
The odds that GBPUSD will rise this year:
(1) There is nothing so far in the news that will effect the seasonality in the GBP, the only risk is the rising fears of a trade war heightening again this month.
(2) The local environment is great: the public sector wage is on the move up.
(3) Reduction in political uncertainty- EU/UK agreed on a transition agreement
(5) GBP central bank is hawkish in raising rates.
This is the 39th Year that GBPUSD normally goes up every April.
This is due to the following:
Seasonality
(1) End/Start of the UK tax year.
(2) Heavy month of dividend payments (repatriation) by U.K. companies. Income/dividends from commodity-based FDI investments.
Anything that will affect the above can through of this pattern.
For example:
In the year 2000, we were having a dot com burst!
In 2004, Tony Blair announces a change in government policy: A referendum would take place. Certainly, this would throw off the pattern.
In 2008, there was a financial crisis. Ah, and the UK pattern was flat, it foreshadowed bad things to come.
In 1984, the there were mass shootings, miners strikes and the government had budget problems that month.
Those were the only three times that the pound fell. Eight times out of the thirty-eight times, the pound was flat and/or did not rise up that much; however, the rest were positive and brought in more than 200 to 300 pips; sometimes 600 to 800 pips. If only looking back 10 year, then 99% of the time going back 10 years, there is a rise in the pound; however, if one looks back for 38 years, then 71% of the time, in April every year, there is a rise in the GBPUSD.
This is not the TWI, but only GBPUSD. Possibly the TWI always rose 100% of the time.
The odds that GBPUSD will rise this year:
(1) There is nothing so far in the news that will effect the seasonality in the GBP, the only risk is the rising fears of a trade war heightening again this month.
(2) The local environment is great: the public sector wage is on the move up.
(3) Reduction in political uncertainty- EU/UK agreed on a transition agreement
(5) GBP central bank is hawkish in raising rates.
Comment:
Comment:
Capturing the swings of the stock market & currency market. It's a dirty job and equity/currency traders must do it.
However, the falling range of this pair is still in normal levels; well within the range of an April seasonal rally.