The Christmas holidays are upon us again, so be prepared for what’s to come over the next two weeks

Today is likely to be the last proper trading day of the year.

We’ve been speaking to people in the industry (banks/fin firms etc) and it seems nearly all the financial world is packing up COB tonight.

Lots of people are using up holiday time which they weren’t able to use through lockdowns, and others just want the time off. That goes for bank staff and a lot of their customers. There’s been plenty saying they’ve brought forward EoM/Qtr/Yr business to this week too (something we’ve seen via the fixes), which leaves things uncertain for the usual year-end business to be done.

The last two weeks of the year can often be quiet but this one might be very quiet. That means several outcomes for us. There’s likely going to be very little movement in prices due to the lack of liquidity but also a greater risk of seeing some dodgy price moves on that thinner liquidity. If you’re trading, you need to watch for that and your broker spreads. Obviously one important factor that might cause markets a problem is Brexit, if that’s still dragging on through the next 2 weeks. That might make GBP very troublesome in both volatility and spreads.

Outside of that, and for the reasons above, there’s always a chance of seeing a mini-flash crash, like we saw in Jan 2019 via TRYJPY. If conditions are right, it often doesn’t take much too spark something off. On that note, be warned that the next CBRT rate meeting is 24th Dec. That’s one to watch for TRY.

There is data out next week but the main numbers are GDP revisions in some of the majors. There’s also US PCE & Durables, and a smattering of lower tier UK/EU data.

So, caution if you’re trading right up until last knockings. I personally would advise you to shut it all down and go spend time with your families. It’s been a shit year for many, if not all of us, so the market will forgive you if you take some time off 😉

And while we’re on this subject, if you are packing up early today for the holidays, we’d like to take this early opportunity to thank you for gracing ForexFlow with your presence over this unbelievable year. We hope you stay safe and have a peaceful and loving holiday.

Ryan Littlestone

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