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G10 FX Momentum

• CHF and JPY stand out as currently having the strongest momentum amongst G10 FX over a three month period. Our FX momentum signals for CHF (+0.71) and JPY (-1.24) indicate that momentum is still elevated and expected to continue over the next three months based on consistent previous readings (prior 1M to 3M).
• To profit from our momentum signals in the month ahead, we recommend short JPY positions. Our back-testing analysis reveals that momentum following trade recommendations for the JPY over one month windows have proven profitable.

• In contrast, our back-testing analysis reveals that for the CHF our momentum signal is more profitable as a reverse indicator over a one month period. Taking this into account, the current positive momentum signal of +0.71 supports our recommendation for short CHF positions to profit from a reversal of the positive momentum in the month ahead.