Seasonal patterns in the market can be really clear but sometimes the reason for them is not certain. However, sometimes just being aware of a really clear seasonal pattern can give you confidence if it is supported by some other feature of fundamental analysis. A good example is coming up now in the NZDCAD currency pair. It has had a strong period of seasonal weakness.
The NZDCAD is entering a weak time of the year. From April 15 through to May 15 the NZDCAD currency pair has fallen 12 times over the last 14 years. The average return has been-2.16% over the last 14 years with a -23.28% annualised growth return.
Will the NZDCAD fall again this year?
Trade Risks: The main risk to this trade is any fundamental reasons for NZD strength or CAD weakness.