Forex What is a seasonal trend in forex?

[FXOchartist]

The term seasonal trend may be less familiar than the terms technical analysis, fundamental analysis, and sentiment analysis. However, learning about seasonal trends can help traders analyze the market in forex trading.

The term seasonal trend refers to market trends that occur in certain seasons, and often repeat themselves. Seasonal trends in forex can be analyzed more carefully based on statistics created over time. Seasonal trends in forex transactions can be predicted as long as traders have sufficient knowledge.

Referring to the FXOpen blog article, seasonal trends are caused by several factors, namely economics, geopolitics, and local culture. The following are several seasonal trends that can add insight into forex trading to help market analysis, referring to the FXOpen blog.

• Year-End Position Adjustments. This is because at the end of the year investors make portfolio adjustments for taxes and other things and this can influence the market
• Summer Slump. Often occurs in July and August, trading volume tends to decrease.
• The "Santa Claus Rally" occurs during the last five trading days of the current year and the first two trading days of the new year.
• The Holiday Season is like a holiday in local culture such as New Year.
• Tourism Season. A country that relies heavily on tourism, seasonal trends can affect the currency's value. The local currency may strengthen when more tourists visit.
• Seasonal Events: Some countries rely on commodities such as agricultural harvests. For example, Australia's wheat harvest could impact the currency as it experiences a surge in wheat exports, which could strengthen the Australian dollar.

Even though seasonal trends are not as familiar as technical and fundamental analysis, knowing seasonal events may be helpful in making trading decisions.