Is the USDJPY set for seasonal gains?

The USD/JPY, also known as the US dollar/Japanese yen currency pair, is one of the most traded currency pairs in the forex market. It represents the exchange rate between the US dollar, the world’s primary reserve currency, and the Japanese yen, the currency of Japan, which is one of the major economies in the world. The USD/JPY exchange rate is influenced by a variety of factors and one of them is  key economic indicators from both countries. One major driver of the USDJPY pair is coming up on Friday with the PCE print.

The Personal Consumption Expenditures (PCE) index is the Federal Reserve’s preferred measure of inflation because it has a broader coverage of inflation.  The PCE index includes a wider range of goods and services compared to other inflation measures, such as the Consumer Price Index (CPI). It encompasses expenditures by households and nonprofit institutions, providing a more comprehensive picture of consumption patterns.

There is a noteworthy period of seasonal strength for the USDJPY ahead between March 28  and April 08. The average return has been 1.25% and over the last 20 years the pattern has a 85% winning trade percentage. The largest gain has been over 9% and the largest drop has been around .

Could the USDJPY find strength this Friday if the PCE print comes in above expectations?

The major trade risk here is that Japan may intervene in the USDJPY to prevent strong gains as a weak JPY makes imports more expensive. So, sudden USDJPY falls cannot be ruled out and are a real risk…

Remember, don’t just trade it Seasonax It!

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