GBP/USD August Seasonality Pattern Points to Bearish Trend

The August seasonality pattern in forex trading has proven to be particularly bearish for GBP/USD, with an average return of around -0.5% since 1971.

This month, however, may see a continuation of last month's trend, where the British pound bounced against the US dollar after navigating the new Prime Minister relatively smoothly.

The key level to watch will be the confluence of the July high and 78.6% Fibonacci retracement of the May-June drop; as long as that level holds, the seasonal tendency hints at the potential for weakness in GBP/USD.