Forex Market Preview

30 December 2016 – Dean Forex Market Commentary

Today is the last trading day of the year and already we can see evidence that there is very little market participation this morning. Traditionally this can be the worst day of the year for retail forex traders as big market players’ start rebalancing their portfolios, and after such a turbulent 2016 it is only natural that you will see some profit taking or reduction of positions.

In the Zone

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Recap

Today is the last trading day of the year and already we can see evidence that there is very little market participation this morning. Traditionally this can be the worst day of the year for retail traders as big market players’ start rebalancing their portfolios, and after such a turbulent 2016 it is only natural that you will see some profit taking or reduction of positions.

If there was any doubt as to what kind of havoc this reduced liquidity can wreak, one only needs to look at both the EURUSD and USDCHF first thing this morning where there was a move of 150 pips and 200 pips respectively this morning.

The USD has surged recently on the back of higher rate expectations and the USD Index seemed somewhat under siege yesterday as the greenback traded near the bottom of its 2 week range. This is still not a reason for the EUR and CHF to trade as it did, there was neither a technical nor a fundamental reason, only natural trading conditions where the market is too shallow to absorb any kind of move.

Liquidity will further dry out today and we could see more surprising moves and drama. Days like this are not conducive to either technical or fundamental trading and so I will sit the day out today and instead start preparing for 2017. There won’t be any daily technical levels today as trading today could be very random.

2016 has proved to be one of the most volatile ones in record and I hope that the combination of reports, daily ranges and daily videos have proved to add value to your trading routine. Enjoy the celebrations this weekend and we look forward to a successful 2017.

Important Economic Data out today

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Dean's Daily FX Update – 30 December 2016

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