Intuitively traders get a sense of volatility cycles as they occur with their favorite currencies. Here's some perspective for you to consider when looking at each of the majors using weekly data. Three of the majors stand out as having increased volatility when looking at the shorter-term 5 and 10 week volatility compared to where they have been over the last two years. Longer-term 30 and 120 week volatility remains quite low across the board. However, this should also serve as a warning. Volatility tends to recycle when least expected.
Part 2 - Here is another example to illustrate the forex majors overall volatility trend over the last two years along with their ranking from highest (1) to lowest (8)
Thanks for the info! where are you getting this from? I’m looking into this type of thing because my forex trading strategy works well in low volatility environments
Can we consider US dollar safe heaven then? Surprising results I should say. I'm also curious why AUD is the most volatile currency in the short term? Dependence from commodities market?
My pleasure! These are some market analytics from my company. Glad you know which environment your system works best in and when to apply it. Best trades to you!
USD - counter-intuitively for many, yes. AUD - is a carry trade wind, unwind story and has been increasingly unwound with great intensity. Check AUDJPY... Best trades to you!
Yes like high volatility precedes low volatility. Cyclically, unlike price, volatility is predictable.
It has so called "volatility windows" if there is some volatility persists you can expect to linger for some more time and build strategies on this.