Typically Forex trading during summer becomes a lot of different. Most people take vacations, and just average traders but just everybody, including people making major decisions, which could influence the markets in a big way. This is generally known as the “summer effect”, or slowdown, and happens, in one form or another, every year. It is hard to quantify what exactly happens, but trading is somewhat thinner and many market participants find it more difficult to choose winning trades.
Most of the time the summer effect takes place in July and August, but it is just possible that this year is a little different. With the World Cup under way, trading, especially during the European session could have a strange feel to it. And not just tonight, but for the next 2-3 weeks. And after the directionless Friday, Monday could be tricky altogether. Hard to say, if what happened late last week was an exhaustion of earlier trends or simply a pause in them. Guess we’ll see soon.
It will be interesting to see if the Swiss Franc will bend to the wishes of SNB and get weaker some more. Personally, I don’t want to touch the EUR-CHF, but USD-CHF is a pair that has some promise here. If the last high is broken, the upside momentum should continue. The next resistance is not very far off, at 1.1640, but that still could provide about 80 pips move.
Outside of that, gaps are always a possibility and most likely to form in the Yen pairs. Good idea to watch for them and see if some trading opportunities emerge there. What happens on Monday (or Sunday evening here) should provide clues for the rest of the week.
Mike K.
[...] Early summer effect this year? | fxmadness.com Personally, I don’t want to touch the EUR-CHF, but USD-CHF is a pair that has some promise here. If the last high is broken, the upside momentum should continue. The next resistance is not very far off, at 1.1640, but that still could … View full post on EUR/CHF – Google Blog Search [...]
[...] Personally, I don’t want to touch the EUR-CHF, but USD-CHF is a pair that has some promise here. If the last high is broken, the upside momentum should continue. The next resistance is not very far off, at 1.1640, but that still could … View full post on EUR/CHF – Google Blog Search [...]
A lot of movement so far. Not huge but all over the place. You looking to fill the gaps?
Mike, are you going to post more of the short term trades like on Friday with commentaries? I’d like to learn how to trade short term…
Yes, Heather, but no signs of reversals yet.
Well, Kramer, I discussed it before. Covering very short term trades would make sense if I was able to keep updating the blog many times during the day. i simply have no time for that. Besides, this is not my favorite approach to trading.
[...] was not easy to chose what to trade yesterday, so focus was on market opening, looking for clues there. There were quite a few gaps, nothing [...]
[...] a sporadic fashion last week, the volume has gone out the window. Very much what happens during the peak of vacation season. Of course it is too early in the year for that, by at least a month. It is all blamed on, or [...]
Great information! I’ve been looking for something like this for a while now. Thanks!