June Forex trading patterns
The month of June in the forex market
starts a four month progression, featuring some of the strongest and
most interesting calendar (“seasonal”) price movement patterns of the year. In
each month at least one of the major pairs – and generally some of the primary
crosses as well – has demonstrated a strong directional tendency.
For the month of June, the pair to watch is USD/CAD. Every
year since 1999 the Canadian Dollar has appreciated against the US Dollar.Â
That’s seven years in a row since the inception of the Euro. These have been no
incidental moves either. On average, one selling USD/CAD at the start of the
month, and buying back at the end over that span would have made about 220
pips. Actually, the bias has been strongest in recent years, with 2004 and 2005
posting declines of nearly 300 pips.
Given the trends in the USD right now, it certainly would not
be hard at all to see USD/CAD post an eighth straight down year for the month of
June in 2006.
Most of the USD/CAD declines seem to take place in the latter
part of the week. On average, Wednesday, Thursday, and Friday during the month
of June have accounted for 50 pips in downward action each week, with Wednesday
and Friday in particular being to the downside about 65% of the time.
There are also some other intriguing weekday patterns for the
month of June which could interest short-term traders:
- EUR/USD has risen 67% of the time on Friday, averaging 20
pips. - GBP/USD has risen 70% of the time on Thursday, averaging 34
pips. - USD/CHF has risen 65% of the time on Wednesday, averaging
31 pips, but fallen 63% of the time on Friday, averaging 26 pips.
Of course the figures presented herein are simple observations
based on the last seven years worth of data. Just because a pair has
demonstrated a tendency to act on this way or that does not guarantee that it
will do so again this time around. This information is probably best used to
help one bias her/his trading, not necessarily as an outright trade decision
tool. As always, sound risk management is strongly recommended.
Note: The statistical information
provided in this article is presented in
Opportunities in Forex
Calendar Trading Patterns, a 175+ page research report. A sampling of that
report covering June data can be requested
here.
John Forman is the author of
The Essentials of Trading
(Wiley) and a near 20-year veteran of trading and investing across a wide array
of markets and instruments. He is also Managing Director & Chief Trader for
Anduril Analytics.
His daily market commentary and analysis can be found in the
Anduril Trading Report.