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I've been speaking about seasonal cycles in FX trading last month in the Article contest, read more about it here: Seasonal Cycles in Fx Trading
You can find there more details how this seasonal patterns affect the exchange rate and more importantly how to correctly use them in your trading activity. The seasonality cycles will bring in a new dimension in which you can analyse the market. Seasonality are a predictable change in price that repeats every day, week, month, year at the same period in time.
This seasonality cycles will only give you the tendency of an particular currency pair to bottom or top or rally or fall, at certain point in time. Going forward we're going to analyse what are the September seasonal patterns in FX market.
It is no surprise that EUR/USD is already down 250 pips as the seasonal patterns suggest(see Figure 1) that at beginning of September the sell of started in August should continue until mid September. We have to keep in mind that earlier September is the second best month for euro, so in this regard we can say that probability are that in coming weeks we should see at least a pause in current bearish EUR/USD trend.
We can see the same pattern as with the euro, that the sell of started in August is slowing down as we enter in September and usually this month is characterized by consolidation, so keep that in mind when trading GBP/USD, maybe it's best not chasing momentum.
If we take in consideration the 15 year average September is a flat month for aussie. However we can see that the 5&10 year average points to a rebound by mid September.
Keep in mind this seasonal pattern only gives you the tendency of an given currency to bottom or top or rally or fall, at certain point in time. So it's better to use it in combination with your strategy as this seasonality cycles can only tell where the probabilities lie.
Best regards,
Daytrader21
You can find there more details how this seasonal patterns affect the exchange rate and more importantly how to correctly use them in your trading activity. The seasonality cycles will bring in a new dimension in which you can analyse the market. Seasonality are a predictable change in price that repeats every day, week, month, year at the same period in time.
This seasonality cycles will only give you the tendency of an particular currency pair to bottom or top or rally or fall, at certain point in time. Going forward we're going to analyse what are the September seasonal patterns in FX market.
- EUR/USD Seasonal Pattern.
It is no surprise that EUR/USD is already down 250 pips as the seasonal patterns suggest(see Figure 1) that at beginning of September the sell of started in August should continue until mid September. We have to keep in mind that earlier September is the second best month for euro, so in this regard we can say that probability are that in coming weeks we should see at least a pause in current bearish EUR/USD trend.
Figure 1. Euro Seasonality Cycles.
- GBP/USD Seasonal Pattern.
We can see the same pattern as with the euro, that the sell of started in August is slowing down as we enter in September and usually this month is characterized by consolidation, so keep that in mind when trading GBP/USD, maybe it's best not chasing momentum.
Figure 2. Pound Seasonal Cycles.
- USD/JPY Seasonal Pattern.
Figure 3. Yen Seasonality Cycles
- AUD/USD Seasonal Pattern.
If we take in consideration the 15 year average September is a flat month for aussie. However we can see that the 5&10 year average points to a rebound by mid September.
Figure 4. AUD Seasonality Cycles
Keep in mind this seasonal pattern only gives you the tendency of an given currency to bottom or top or rally or fall, at certain point in time. So it's better to use it in combination with your strategy as this seasonality cycles can only tell where the probabilities lie.
Best regards,
Daytrader21
