Five Currencies, One Message: Is a 75-Day U.S. Dollar Rally Taking Shape?

In August, I wrote an article for Barchart about a 75-day seasonal selling window in December Euro FX futures, asking whether traders were prepared for the potential decline. That pattern now deserves renewed attention. Additional 15-year seasonal studies show that several other U.S. dollar-paired currencies have historically weakened during the September window: December Swiss franc and New Zealand dollar futures declined in 14 of the past 15 years, while December Euro FX, British Pound, and Japanese yen futures declined in all 15. Those percentages—93% and 100%, respectively—describe historical consistency, not certainty, and a 15-year sample should never be mistaken for a guaranteed outcome. Nevertheless, when several independently traded currencies begin to exhibit comparable seasonal behavior against the same counter currency, the common denominator matters. In this case, that denominator is potential U.S. dollar strength. Seasonality identifies the window, but the trade still requires confirmation from price structure, momentum, and risk parameters appropriate to current volatility.

Global Interest Rates 

The interest-rate backdrop provides a credible fundamental tailwind for that seasonal tendency. However, the policy picture is more nuanced than simply describing the Federal Reserve as hawkish and everyone else as dovish. As of early September, the Fed’s target range stands at 3.50%–3.75%; July’s FOMC minutes described economic growth as solid and inflation as remaining above the 2% objective. The ECB has also tightened, raising its deposit rate to 2.25% in June before holding steady in July, while the Bank of Japan has moved its policy rate to 1%. Even after those adjustments, however, U.S. short-term rates remain appreciably above comparable policy rates in the euro area and Japan. That differential can support the dollar through carry demand and the relative appeal of dollar-denominated fixed-income assets. Traders should recognize the counterargument: additional ECB or BOJ tightening, particularly a faster-than-expected normalization in Japan, could narrow that advantage. For now, persistent U.S. inflation and resilient activity leave the Fed less room to ease aggressively, preserving a fundamental backdrop consistent with seasonal dollar strength.

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Technology Impact on the U.S. Dollar 

A second source of support is the U.S.-centered cycle of artificial-intelligence investment. Research by the Federal Reserve and the Bureau of Economic Analysis indicates that spending on software, computing equipment, and other AI-related infrastructure has contributed meaningfully to recent U.S. growth. That capital cycle may reinforce the growth gap between the United States and slower-moving economies in Europe and parts of Asia while continuing to attract global investment into American companies and financial markets. Foreign purchases do not translate dollar-for-dollar into permanent currency demand—investors may hedge their exposure, and equity valuations can reverse—but sustained capital inflows can still strengthen the dollar’s underlying bid. The greenback also remains the world’s dominant reserve currency, accounting for approximately 57% of allocated global reserves at the end of 2025, despite its gradual long-term loss of market share. Deep Treasury markets, liquidity, relatively attractive yields, and demand for defensive assets during geopolitical or energy-market stress remain important advantages. Taken together, seasonality, rate differentials, relative growth, and safe-haven demand present a coherent bullish-dollar thesis—but one that price action must confirm.

Currency Futures and Spot Confluence 

Currency futures and the spot market are highly correlated because both reflect the currency’s spot value relative to the U.S. dollar. Although futures contracts trade on a regulated exchange and have set expiration dates, while the spot market trades over-the-counter without an expiration date, their prices generally move in the same direction and remain closely aligned through arbitrage. Therefore, the approaching seasonal sell pattern can be applied to either December futures or the spot market. Traders should still account for differences in contract specifications, leverage, financing costs, and trading hours when selecting the market that best fits their plan.

Cash U.S. Dollar ($DXY) Technical Picture  

Source: Barchart 

Technically, the $DXY still looks weak as it trades both sides of the 200-day moving average. Price action shows lower highs and lower lows, a downtrend. Fortunately, the upcoming seasonal pattern is 75 days, allowing time for U.S. Dollar strength to develop. The major moving averages have not confirmed the downtrend by stacking in any sequential order, unlike the uptrend leading to the June price peak, when the averages were stacked sequentially higher. From a technical standpoint, it appears that patience is the appropriate course of action at this time. 

Barchart Seasonal Pattern 

Source: Barchart Seasonal Returns 

Annually, September appears to have had the second-best monthly gains in the past 15 years. Will 2026 confirm the seasonal pattern? 

Moore Research Center (MRCI) Seasonal Pattern 

Source: MRCI 

MRCI’s September Seasonal Report states that 5 of the 15 trades this month are bullish on the U.S. Dollar. The average trade length is 19-54 calendar days. Hypothetical testing shows average profits ranging from $1,172 to $3,135. This level of confluence in a particular sector has strengthened the seasonal strategy. 

As a crucial reminder, while seasonal patterns can provide valuable insights, they should not be the basis for trading decisions. Traders must consider technical and fundamental indicators, risk management strategies, and market conditions to make informed, balanced trading decisions. 

Key Assets to Trade the Bullish U.S. Dollar Seasonal Pattern:

• Currency Pairs (Forex): Selling the ^EURUSD, ^CHFUSD, ^NZDUSD, ^GBPUSD, and the ^JPYUSD pairs (going short) is the most direct way to play this trend

• Currency ETFs:

• Fixed Income & Safe Havens:

  • U.S. Treasuries: Investing in U.S. government bonds, often seen as a haven when the dollar strengthens. Example: $TNX

  • Cash (USD): Simply holding U.S. dollars to gain from the strengthening relative to the euro.

• Derivatives:

  • Forex Futures & Options: Trading E6: Euro, S6: Swiss Franc,  N6: New Zealand Dollar, B6: British Pound, and J6: Japanese Yen on exchanges like the CME to take advantage of currency price movements. Options on futures contracts or the U.S. dollar index (DX).

• Equities: Buying shares in US-based companies that are expected to benefit from a stronger domestic currency (e.g., importers).

In Closing… 

The evidence presents a compelling case for watching—not anticipating—the next phase of U.S. dollar strength. A historically consistent seasonal window is approaching, supported by favorable interest-rate differentials, resilient U.S. growth, AI-related capital investment, and the dollar’s continuing role as a reserve and safe-haven currency. Yet the $DXY remains technically vulnerable, reminding traders that even strong fundamental and seasonal confluence cannot dictate when a move will begin. The opportunity, therefore, is not a call to act prematurely, but an invitation to prepare: identify the appropriate market, define the technical confirmation required for entry, and establish the risk before capital is committed. If price action begins to confirm the historical pattern, traders will be positioned to participate with discipline rather than emotion; if confirmation never arrives, patience may prove to be the most profitable trade of all.

On the date of publication, Don Dawson did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com