What is called a seasonal trend in forex trading?

[Hanan Öberg]

Seasonal trends in forex trading refer to recurring price movements that tend to happen at certain times of the year due to historical patterns. Apart from technical analysis, fundamental analysis, and market sentiment, seasonal trends can be an additional tool to anticipate currency behavior.
Seasonal trends are supported by long-term data and are influenced by factors such as economic cycles, geopolitical events, and local cultural activities. Although they are not as widely used as other analyses, they can still help traders improve entry and exit decisions.
Examples of seasonal trends include year-end portfolio adjustments, where investors rebalance holdings for tax and reporting purposes, often affecting currency prices. The summer slump, usually in July and August, sees reduced trading volume. The Santa Claus Rally occurs around the end of December and early January. Holidays, tourism seasons, and commodity-related events like harvests can also impact currency strength.
Understanding seasonal trends can enhance market insight. Trading these opportunities is easier with TradeSmart Broker, offering advanced tools, tight spreads, and a reliable trading environment for smarter decisions.