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Forecast for AUDJPY for August 2020

July 30, 2020

July 30, 2020

Forex in August: market getting ahead of itself?Dmitri Demidenko

Fundamental forecast for Forex currencies for August

Selling the U.S. dollar as a safe-haven asset may have gone too far

To say that July was successful for fans of statistical analysis with a fundamental perspective is an understatement! Selling [USD/NOK][1] and [USD/SEK][2] has increased the deposit by a total of 10.1%, buying Australian and Canadian dollars against the American dollar has increased it by 4.5%. The Norwegian krone managed to simply hold out against the hugely popular euro, while the Swedish krona gained 1.5% against it. Indeed, [Vikings are on the warpath][3]! It will be all the more interesting to observe the influence of the seasonal factor on the exchange rates in Forex at the end of the summer.

The Japanese yen and the Swiss franc usually feel the best in August, strengthening in 26 and 25 cases respectively out of 45. The clear outsiders were the Australian and New Zealand dollars, as well as the British pound, which finished two last months of the summer in 1975-2019 in the red zone.

Rise-and-fall periods

![LiteForex: Forecast for AUDJPY for August 2020][4]

Source: BoE, calculation by LiteForex.

A similar picture is observed when studying averages and medians. Among the leaders are safe-haven currencies and monetary units of oil- exporting countries, assets that are usually classified as risky are in the outsiders, although at present, considering the sharp decrease in rates by the central banks of Australia and New Zealand, there are doubts of the truth of this statement. In any case, such an alignment of forces usually occurs when the global appetite for risk decreases, and it should be noted that there are prerequisites for this.

Average and median values

![LiteForex: Forecast for AUDJPY for August 2020][5]

Source: BoE, calculation by LiteForex.

Based on the leading indicators from Bloomberg, the Chinese economy lost momentum in July after impressive growth in May-June. The aggravation of US-China relations has been bothering investors for a long time, and the dam could give way at any moment. If we add to this the overbought, in terms of P/E, [S&P 500][6], then the situation becomes threatening for fans of risky assets. Primarily for Ozzy and Kiwi because of Canberra’s and Wellington’s close ties to Beijing. It should be noted that in the worst times, the Australian and New Zealand dollars lost an average of 2.4% and 3.2% of their value respectively.

Dynamics of currency rates during rise-and-fall periods

![LiteForex: Forecast for AUDJPY for August 2020][7]

Source: BoE, calculation by LiteForex.

The situation for the bulls in [AUD/USD][8] is aggravated by the record growth of Covid-19 infections toll in certain states of Australia, which casts doubts about the faster recovery of its economy compared to the world counterparts. In my opinion, further escalation of the conflict between Washington and Beijing in August will allow selling [AUD/JPY][9] and [NZD/JPY][10].

As for the potential weakness of the British pound, the main reasons may be the deadlock in the Brexit negotiations, the slow return of the GDP of the U.K. to the trend, as well as the correction of the S&P 500. The best way to work with these ideas is by selling [GBP/CHF][11]. The Swiss franc is able to benefit from fears of a second wave of the pandemic in Europe and worsening macroeconomic statistics of the euro area. These factors are likely to hold back the further advance of [EUR/USD][12] to the north.

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Price chart of AUDJPY in real time mode

![Forex in August: market getting ahead of itself?][15]

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

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  1. my.liteforex.com/trading/chart?symbol=USDNOK
  2. my.liteforex.com/trading/chart?symbol=USDSEK
  3. www.liteforex.com/blog/analysts-opinions/forex-in-july-vikings-are-on-the-warpath/
  4. cdn.liteforex.com/cache/uploads/blog_post/fundamental_analysis/stat1-30-07-20.jpg?w=30&s=af477fb6f66eb5e3c54529db6947cbc8
  5. cdn.liteforex.com/cache/uploads/blog_post/fundamental_analysis/stat2-30-07-20.jpg?w=30&s=37add7025612fc8e167cfddef33fc209
  6. my.liteforex.com/trading/chart?symbol=SPX
  7. cdn.liteforex.com/cache/uploads/blog_post/fundamental_analysis/stat3-30-07-20.jpg?w=30&s=902165b51c7c8fc7e83c89ef30405a99
  8. my.liteforex.com/trading/chart?symbol=AUDUSD
  9. my.liteforex.com/trading/chart?symbol=AUDJPY
  10. my.liteforex.com/trading/chart?symbol=NZDJPY
  11. my.liteforex.com/trading/chart?symbol=GBPCHF
  12. my.liteforex.com/trading/chart?symbol=EURUSD
  13. my.liteforex.com/?category=analysts-opinions&slug=forex-in-august-market-getting-ahead-of-itself&openPopup=%2Fregistration%2Fpopup&utm_source=blog&utm_medium=article&utm_campaign=bonus
  14. my.liteforex.com/deposit/?category=analysts-opinions&slug=forex-in-august-market-getting-ahead-of-itself&promo_code=BLOG&utm_source=blog&utm_medium=article&utm_campaign=bonus
  15. cdn.liteforex.com/cache/uploads/blog_post/fundamental_analysis/liteforex-blog-forex-30-07-20.jpg?q=75&w=1000&s=11cc683bb3f4df9f346c2052b6b33c18