As expected during the last week of the year, Forex liquidity is spread thin and we are mostly seeing tight ranges and small movements across the board with all the major Forex pairs. The only currency pair to break out of its range is the USDCAD as the US Dollar hit a new monthly high against its northern neighbor.
US Dollar Index
Overall, the US Dollar Index was trading lower the past few days, slipping slight from its 14-year high as investors took profits ahead of the Christmas weekend. We saw a slight reversal of its losses today as the USD made a half-hearted effort to move upward in-between two major holidays. A bullish Greenback is well supported in anticipation of rising U.S. growth and rumors of interest rate increases coming in 2017.
Do Not Force A Trade
Christmas and New Years always ushers in slow trading conditions and lack of market luster, so as usual we recommend that you do not try force a Forex trade when there is none. Many Forex traders have already closed their portfolio out before the new year, which highly reduces liquidity in the market.
Remember Forex traders that Monday January 2nd is a bank holiday for most countries. While there are a few significant events before January 2, 2017, nothing is expected to majorly move the market until on or after Tuesday January 3rd.
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