March was all about Australian dollar longs and yen shorts but overall it wasn’t a great ‘trending’ month. It was choppy as the market dealt with the fallout in Ukraine and waited for better data on the strength of the US economy.
At the start of the month, we sorted through the March seasonal patterns and pointed out three of the trends. Here’s how they did:
#3: Hunt like a shark Down Under
We noted that March was a solid but not spectacular period for AUD/USD and suggested using dips to get in. It turned out being a great month for the Aussie, gaining 4% but buying the dips was a good strategy too. One of them came after the FOMC decision and since then, the pair has gained 250 pips in a nearly straight line.
Verdict: If you bought a dip in AUD/USD, you made money.
We wrote:
March is the second-best month for euro longs, averaging a 1.06% gain over the past 10 years including 6 of the past 8 years.
The euro finishes the month virtually flat but we wrote it on March 3 when the euro was already down 0.5% so it’s up slightly from there. The good news is that the trade was never more than 35 pips in the red and was up by as much as 240 pips before the ECB jawboning started.
EUR/USD daily
Verdict: It started out as a good trade but faded. Score it a push.
#1: Don’t forget about USD/JPY
We wrote:
On average, March is the best month of the year for USD/JPY and then trend has held up recently with gains in 5 consecutive years.
Make it 6 years. It might not have felt like it because of all the volatility but it was a solid month for USD/JPY longs, gaining 1.25%. Again, if you bought on March 3, you were virtually never holding a loss.
Verdict: Score it a win for seasonals.
Final score: 2 wins and a tie.
