It’s the day before Christmas Eve and the markets are certainly aware of that. Traders should expect major bouts of consolidation from now until January 4th as the holidays stroll around.
For the US Dollar Index (DXY), price is expected to consolidate between 90.00 and 91.00. Price action analysis indicates that the index is still bearish in the long-term as the daily downtrend is still intact. Traders will be looking for price to breach 90.00 in the new year to continue their Dollar shorts. Smart money is also bearish for the Dollar and expects the price to continue its path lower in 2021.
As a result of the DXY consolidation, many of the majors such as EURUSD, GBPUSD, and AUDUSD are moving without a direction. For the most part, price action analysis still foresees further rallies for the majors. The Euro will consolidate within its daily range. After the holidays, traders forecast the price to make a rally to 1.25500. The current price action for GBPUSD and AUDUSD is slightly bearish so these pairs will have to be revisited in January.
This is the last day for traders to close any remaining open positions before most brokers close their trading desk. Traders are encouraged to take a break from the charts and spend some time with family. Within no time, the new trading year will be here. Happy holidays!
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- Read yesterday’s breakdown: DXY to 91.00 and Majors Look to Short
