Bank of America Global Research discusses the USD seasonal outlook and maintains a bullish USD bias for the rest of the year.
The US dollar calendar seasonal picture improves markedly over the next 3 months. Since 2010, the BBDXY has been up an average 2% over the next 60 trading days. The strongest USD seasonal is against JPY, with USD/JPY rising 9 out of 10 times for an average gain of about 4% over the next 60 trading days. The second strongest is against CAD, with USD/CAD rising 9 out of 10 times for an average gain of about 2%," BofA notes.
"Separately, this also coincides with a bullish event seasonal around US Presidential elections. Specifically, the DXY has been up 7 out of 10 times over the next 60 trading days since the 1980 election for an average gain of 2.5%. If we condition for positively correlated instances in which USD has sold off as now, we find that DXY was up all 4 times for an average gain of 3.4% over the next 40 trading days. The most highly-correlated (at about 50% over the last 20d and 80% over the last 60d) election seasonal is 1992, at which time the DXY bottomed around now and rose by 15% over the next 60 trading days," BofA adds.