In 8 out of the past 10 years, the U.S. dollar appreciated against the Japanese yen in the month of July. Based upon seasonality, we could expect further strength in USD/JPY.

July is a very unique month in the currency market because not only do we have strong cases of seasonality, but it also happens to be the worst performing month for certain currencies.



USD/CAD and Energy Correlation

It is no secret that Canada owns one of the world’s largest oil reserves. There it is logical to assume that USD/CAD would be correlated to oil prices. We have shown the results of this study often and even showed a recent chart illustrating the correlation.

However, here is another correlation that you may find interesting. USD/CAD has a nice positive relationship with the energy sector ETF which makes logical sense. So if you are trading USD/CAD, make sure you keep an eye on the ETF for any anomalies.



Kathy Lien is Director of Currency Research at GFT, and runs KathyLien.com.