April Forex Trading Patterns
Maybe because it's the start of a new quarter or
fiscal year, or maybe for some other reason, but April does not show much in the
way of directional bias in the major forex pairs. AUD/USD has risen five of the
last seven years (the time since the introduction of the Euro), but not in any
meaningful fashion on average. The remaining pairs - EUR/USD, GBP/USD, USD/CHF,
USD/JPY, USD/CAD - all were virtual coin tosses, being essentially evenly split
between up years and down ones. The same is true for the primary cross rates.
Directional considerations aside, April does tend
to be quite volatile. Consider the following:
| Pair |
|
Pip Range |
| AUD/USD |
|
349 |
| EUR/USD |
|
488 |
| GBP/USD |
|
553 |
| USD/CAD |
|
547 |
| USD/JPY |
|
706 |
| USD/CAD |
|
538 |
The table above outlines the average pip range
for the major currency pairs during the month of April from 1999 to 2005.Even
though the majors may not tend toward moving in one direction or another during
the month, they certainly do move, so short-term traders can expect plenty of
profit opportunities.
There are some specific days of the week which
have demonstrated tendencies worth keeping in mind:
- AUD/USD has risen 64% of the time for an
average of 16 pips on Thursdays in April
- USD/CAD has risen 80% of the time for an
average of 20 pips on Mondays
- EUR/AUD has fallen 69% of the time for an
average of 46 pips on Thursdays
- EUR/GBP has fallen 68% of the time for an
average of 12 pips on Mondays
- GBP/CAD has risen 63% of the time for an
average of 47 pips on Mondays
- GBP/CAD has risen 63% of the time for an
average of 39 pips on Mondays
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.
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.His analysis and market comments have been found in
the financial news media across the world and he has published dozens of
magazine articles on trading methodology and analytic techniques. To learn more
about John's research and trading activities, visit the
Anduril Analytics website.
