Forex Flash: Great Expectations... Is January price action important? - Nomura
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EUR/USD
FXstreet.com (Barcelona) - Nomura Strategist Saeed Amen notes that it is often said that the first five days of price action in January are significant for the rest of the year, but he wonders whether this is really the case.
He has taken a look at the data to see if it fits this market intuition and has found that for the S&P 500, it does follow. However, for EURUSD, performance in the first week does not have much of a relationship with the rest of the year. He extended his research to look at seasonality patterns in January and found that EURUSD has a tendency to fall over the month while the S&P 500 tends to do well towards the beginning of the month. He feels that clearly, as well as seasonal considerations, the beginning of 2013 is also likely to be affected by news around the US fiscal cliff and the "mini-deal" that has so far helped markets.
He has taken a look at the data to see if it fits this market intuition and has found that for the S&P 500, it does follow. However, for EURUSD, performance in the first week does not have much of a relationship with the rest of the year. He extended his research to look at seasonality patterns in January and found that EURUSD has a tendency to fall over the month while the S&P 500 tends to do well towards the beginning of the month. He feels that clearly, as well as seasonal considerations, the beginning of 2013 is also likely to be affected by news around the US fiscal cliff and the "mini-deal" that has so far helped markets.
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