The early May UK bank holiday is known as May Day, and it falls on Monday, May 5th, 2025. It is a public holiday for an ancient celebration of spring, rebirth, and fertility.
In this article, let us look deeply into the factors that impact currency price movements and possible strategies to overcome potential losses.
Understanding Early May 2025 UK Bank Holiday Forex Trading Hours
If you are trading UK-related assets or using a UK-based broker, it is necessary to understand the Early May 2025 UK Bank Holiday Forex trading hours to avoid surprises and plan trades effectively. Guess the real reasons why most Forex traders fail and lose money? Almost 90% of them entered the wrong time into the Forex market. Only experienced traders know when to trade Forex for maximum profits, and they plan their schedule accordingly.
What is early May bank holiday? The early May UK bank holiday is observed every year on the first Monday of May, which falls on 5th May this year, 2025. Traders typically expect this public holiday to have a greater impact on the financial markets, especially in the FX market, in various aspects.
Impact of the Early May Bank Holiday on the UK Forex Market
Are Forex markets open on Early May Bank Holiday 2025? Yes, the forex market remains open on all public holidays, including the UK’s May Day. The forex market generally operates 24 hours a day from Sunday evening to Friday evening GMT.
When does the UK Forex market close for the May Bank Holiday? The early May UK bank holiday will not affect the opening and closing of forex markets, as the global Forex markets remain open 24/5 as usual. However, we can expect a drop in the level of participation in terms of volume in some regions, which could impact trading outcomes.
There are also other important factors that can influence currency price movements as follows:
Lower liquidity
Though London is the world’s largest Forex trading hub, the closure of UK banks and financial institutions significantly reduces liquidity during the London session. This can lead to wider spreads and lower volatility during the forex trading hours.
Reduced trading volume
When there are fewer participants, it means less activity in GBP pairs, including GBP/USD, EUR/GBP, etc, and possibly reduced volatility across major FX pairs.
Increased volatility
Thin markets can cause sudden price spikes or slippage, usually leading to increased volatility.
Overlap with US markets
The London session is the most volatile forex session, generally during its overlap with the New York session (12 pm to 4 pm GMT). Due to overlapping trading hours in Europe and North America, the Forex market witnesses the highest trading volume and liquidity, leading to significant price swings.
Best Forex Strategies for Early May Day 2025 Bank Holiday
While Forex traders can trade effectively with the right strategies, they may still experience unique challenges on May Day 2025, especially in the London session. Here are the top strategies for forex trading on UK May Day:
Avoid trading GBP pairs
It is safe to avoid trading currency pairs that involve GBP, such as GBP/USD, EUR/GBP, during May Day because such pairs may witness thin volume and unreliable price action. Specifically, FX traders can avoid initiating trades during the London session (8 AM to 4 PM BST) unless a clear setup exists.
If you still don’t want to miss the trade opportunity, we suggest using wider stop-losses and lower position sizes that would help you minimize potential losses.
Perform range trading
When the trading volume is low, it is very common that prices often oscillate within a range. You should identify significant support and resistance zones on the hourly charts and trade bounces. We recommend traders use tight take-profits and stop-losses while entering at support or resistance levels. This would help in avoiding losses in false breakouts.
Stay on the sidelines
The nationwide closure typically limits domestic transactions, causing minimal market activity and further lowering liquidity. While low participation can lead to unpredictable moves and slippage, it is better to treat the bank holiday as a “no-trade” day. In trading, even “not doing anything” can be the best strategy rather than risking your capital.
Do scalping in active pairs
Scalping can be recommended in the active currency pairs as volatile spikes are more common in thin markets. However, you should manage risk closely and maintain caution on short-term inefficiencies in a low-volume market scenario.
Traders should use tight spreads brokers and prefer to trade during the NY market open (1 pm to 3 pm BST) as liquidity may pick up during those late hours. We advise focusing on high-liquidity pairs such as EUR/USD, USD/JPY, etc.
Use tools and indicators
Traders should use volatility indicators such as ATR and Bollinger bands to gauge price compression or expansion, especially during bank holiday sessions. If your broker offers liquidity trackers, you can monitor order book depth as well. Practice using the economic calendar to avoid surprise news.
What Should Traders Do on Early May 2025 UK Bank Holiday?
- In the midst of increased volatility and low volume trading activities, traders should avoid opening new large positions involving GBP pairs.
- Traders should execute trades expecting irregular price movements or false breakouts and be prepared for the consequences, which may be either favorable or unfavorable.
- Stay informed about any changes in trading hours from your broker so you can plan your trades and prepare to modify.
- Implement tight risk controls by using stop-loss orders and adjusting position sizes to limit potential losses.
- If you are uncertain about the market conditions, you may have to consider taking a break from your trading. This helps prevent significant capital losses.
Conclusion
While the holiday can lead to unpredictable price swings, it presents opportunities for short-term traders who can navigate the increased volatility. It is, however, crucial to exercise caution and employ risk management strategies that help boost your trading.
Learn how to trade Forex safely in UK 2025. By staying informed and implementing the right trading strategies, you can navigate the challenges posed by the UK Early May Bank Holiday 2025.
Pro Tip
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