The changes on the day are light and it shows a lack of desire or motivation among traders to run anything during the week. This is one of those times in markets where there is little point in trying to make sense of any movements as trading conditions are exacerbated by thin liquidity.
I mean it is the holiday season after all. For EUR/USD, a large option ends around €1.8 billion at 1.0425. So, that could bring an attraction factor to the day. But the rest of the week promises to be much quieter.
Overall, the dollar seems to end the year in a prominent position because it has taken advantage of a more hawkish Fed last week. The technicians are definitely favoring the green background as we head into the holiday season anyway. And barring any major trends, trading sentiment should pick up from where we're leaving at the start of next year.
That means we can ignore the movements we see in markets this week as they will have a major impact on thinner liquidity conditions.
This is the perfect time to take a step back, review everything, and look to start the new year fresh. For those who are already enjoying the break, I wish you a happy holiday. And for those who don't, well try to take it easy.
