Many factors influence the international forex market. What impact public holidays of different countries have on the currency market will be answered in this article. During holidays, trade on Forex is often less intense and it is difficult to predict its further movement. Even technical indicators, fundamental analysis and MT4 advisors won’t help a trader clear the situation. This uncertainty is mostly applied to the currency of the state where a holiday takes place.
Forex differs from other financial markets by its uninterrupted activity. There is slackness only on weekends when just major currency instruments are traded in a low volume. During important public holidays, the market’s liquidity drops and cash flows weaken.
Such a situation may lead to a decrease in risk that is highly interrelated with capital invested on Forex. Main participants of the currency market are commercial and investment banks, thus a fall in business activity is due to the closure of financial institutions on this day. It is banks that provide the forex market with the lion’s share of means.
It is perfectly clear why Forex and its participants are such hard workers. This market is international, and it is accumulated on the Web on the accounts of millions of brokers, traders, and market makers. Thus, as long as there is a computer, Internet connection, and access to trading platform, Forex performs.
Let’s get back to our topic of public holidays. Not every highlight in the calendar of a country is crucial enough to be a holiday in other countries. Important holidays include Christmas, New Year, Labor Day, Mother’s Day, etc. It is noteworthy that they may be named differently in different countries. Meanwhile, the business world doesn’t stop these days. Of course, cash flows decline and there are less events to influence the market, but traders practicing fundamental analysis still have an opportunity to earn well. One should use a tested Forex robot or any other program as an advisor.
There is one more moment that you should keep in mind. As a rule, holidays are followed by a lot of important world political and economic news that can affect the market greatly. Thus, well-known large corporations may announce their bankruptcy or, on the contrary, expansion. Politicians may say about new appointments or resignations; some countries may get into crisis. These are only few possible events. Each of the mentioned circumstances has its own impact on Forex and the quotes of world currencies.
All in all, when making a trading plan, a market participant must take into account public holidays.
