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 October seasonal patterns in FX market.
- Euro October Seasonal Pattern
If the 5yr and 10yr average price suggest a rebound in euro in the first half of October, the 15yr average price suggest some consolidation for euro in the first half of October. However after the first half of the month all of the 3 average prices converge and points towards a downside move and a resumption of current euro bearish trend.
- Pound October Seasonal Pattern
Last month the seasonality patterns have nicely predicted the bottom in GBP/USD by mid September. Looking at October Seasonality pattern there is no clear direction as all 3 average prices swing back and forth. We may assume that the pound is going to consolidate after the massive sell of that started from around 1.7100.
- JPY October Seasonal Patterns
Since BOJ has started the massive QE program we can see this seasonality patterns have reversed and usually as we enter the autumn season JPY is weakening not straightening as the seasonality may suggest.
- Aussie October Seasonal Patterns
Looking at October Seasonality pattern there is no clear direction as all 3 average prices swing back and forth. We may assume that the aussie is going to consolidate and take a pause after the recent sell of. The only notable thing we can expect is a rally by the end of a month.
Best Regards,
Daytrader21
