AUD/USD has risen in twelve of the last fifteen February months
In terms of seasonal patterns, February is statistically the most reliable month for AUD/USD gains over the past 15 years. In the second month of the calendar year, the pair has managed to post gains in 12 out of the last 15 Februaries.
But that seasonal trade failed to materialise last year as AUD/USD sank heavily on the back of a sharp selloff in equities/risk (flight to safety) as well as growing concerns about the Australian economy in general.
In the past couple of years, the bullish momentum in equities/risk has played a role in assisting the seasonal pattern here. However, with global markets in the state they are at now (worried about global growth slowdown and the US-China trade war) I would argue that the support from the seasonal trade here looks to be less correlated this year- if not no longer existing.
Even if AUD/USD were to rise this year, I would argue that is owes more to other developments than the seasonal trade flow seen above. The most important of which would be how US-China trade talks develop in the coming weeks. Positive vibes from there will surely give risk assets a bid and help underpin the aussie too but that would just be a coincidence to the above pattern more than anything else.
On the flip side, a breakdown in trade talks or failure to make meaningful progress will see the aussie suffer on the back of further growth slowdown worries in China as well as a selloff in risk assets. That's a double blow that will surely see the aussie end the February month lower.
In that light, don't expect much from the seasonal trade above this year. It's all about the direction of trade talks at this point in time so be wary not to get caught out chasing shadows.
