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Since a new month has started, the best way to asserts the probability of where the market is likely to be heading in this month is for us to look at the seasonality patterns. 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.
You can find more details how this seasonal patterns affect the exchange rate and more importantly how to correctly use them in your trading activity in one of my articles here: Seasonal Cycles in FX Trading
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 November seasonal patterns in FX market.
I would like to start first by looking at the broad based dollar strength/weakness because of the current massive bullish dollar trend, every move in the FX land will be depended on the dollar move. It comes as no surprise last 2 months we had general weakness in the Dollar, look at the chart above how strong the cycle was during that time of the year, you just couldn't ignore it. We can also see the the dollar weakness persist all the way through July as well when a major bottom should be put in place.
Among major currency pairs we can discern a clear pattern with the pound where we have some clear strength. Even though current price action may look overbought and couple with summer range trading conditions the upside may be limited in this case, however I can still see the case where we at least retest the current highs around the big figure 1.6000 before the top is put in place.
Since I'm only looking for clear and discernible patterns NZD?USD seems to have quite a decent trend going into July and we should expect some bounce as the current trend has already run into some kind of support and also the COT report suggest that a reversal may be in play.
Best Regards,
Daytrader21
You can find more details how this seasonal patterns affect the exchange rate and more importantly how to correctly use them in your trading activity in one of my articles here: Seasonal Cycles in FX Trading
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 November seasonal patterns in FX market.
- Dollar Index July Seasonal Pattern
I would like to start first by looking at the broad based dollar strength/weakness because of the current massive bullish dollar trend, every move in the FX land will be depended on the dollar move. It comes as no surprise last 2 months we had general weakness in the Dollar, look at the chart above how strong the cycle was during that time of the year, you just couldn't ignore it. We can also see the the dollar weakness persist all the way through July as well when a major bottom should be put in place.
- GBP July Seasonal Pattern
Among major currency pairs we can discern a clear pattern with the pound where we have some clear strength. Even though current price action may look overbought and couple with summer range trading conditions the upside may be limited in this case, however I can still see the case where we at least retest the current highs around the big figure 1.6000 before the top is put in place.
- NZD/USD Seasonality
Since I'm only looking for clear and discernible patterns NZD?USD seems to have quite a decent trend going into July and we should expect some bounce as the current trend has already run into some kind of support and also the COT report suggest that a reversal may be in play.Best Regards,
Daytrader21
