When you look at currency trading you need to consider all the trends in trading. Trends do not only relate to the directional movement on the marker that you are going to be using to trade. This will also be the trends in the way that people trade. There are a number of seasonal trends that you need to consider. These are trading patterns that have formed on the forex market that affect what people are trading and how they will be trading this.
What are Currency Trading Seasonal Trends?
The seasonal trends that you look at with currency trading are the patterns that have formed in the market over the years. These will be movements that you see in the market each year. When you know what these seasonal trends are you can look at taking advantage of them. Of course, you have to consider that there will be times when the seasonal trends change for the year. The forex market is too unpredictable to assume that these trends will be the same every year. However, knowing about the trends will help you prepare for the possible movements.
Trends in July
One of the seasonal trends that you should consider is the seasonal trend that happens in July on the forex market. This trend relates to the US dollar and Japanese Yen currency pair. Historically this month has seen a positive movement in the currency pair. The exact reason behind this is still unclear, but over the years there has been a positive trend. Of course, there have been some years where the trend has not continued, but overall the trend has been there.
The Trends in August
When you move to August you will see a very different trend for the US dollar and Japanese Yen currency pair. In this month the gains that you find in July are removed and there is an overall negative trend. Interestingly, in the July months where there was a negative movement there has been a positive movement in August. If you are going to be trading any currency pair that has the Japanese Yen then you should know that August is the best month across the market for this currency. That means that you are likely to see positive movements for the currency with all pairs.
May and the North American Currencies
When you look at the seasonal trends then you should consider how May affects the US dollar and the Canadian dollar. In this month you will see a negative movement in this currency pair. This means that the Canadian dollar will be gaining against the US dollar during this month. This has been linked to the movements that you see in the oil prices at this time. As the Canadian dollar is affected by the oil prices you can see how this correlation will affect the currency pair.
Implications for Traders
There are a number of different implications that traders will find with the seasonal trends. These trends will help you determine what you should be trading on the market.