Your Forex Trading Plan during the Holidays and 1st Half of 2015

All eyes are focused on the last FOMC statement of the 2014 trading year which will be released on Wednesday afternoon ET time. Will the statement steer the US Dollar back in its uptrend or has the retracement time finally arrived?

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The statement will probably give Forex traders a sneak preview of the upcoming trading year of 2015 but generally speaking the following developments seem most likely in my forecast for next year:

  1. Typically the market movement slows down during the holiday season and the majority of the trading days will hardly be worth trading. If this is new for you, don’t underestimate the historical seasonal affect of the holidays on the markets and do not beat yourself for focusing on testing or resting;
  2. Typically January has a slow start as well, because a brand new trading year has just started. Although last year’s levels are available, there is a brand new playing field (like new trading day) and the market slowly tests support and resistance.
  3. Bigger long-term (weekly/monthly) trends often start or accelerate in February or March. Grab a weekly or monthly chart and look at each February or March and tell me what you see by writing down a comment down below. I choose the EURUSD as an example and most times work out well with exception of the big 2012 and 2013 consolidation: trends can start if there is no trend present.

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The second half of 2014 has seen the US Dollar in a large uptrend BUT last week’s bullish weekly candles on the EURUSD, GBPUSD, and bearish candle on the USDJPY could hint at a temporary halt of that trend.

The typical slow consolidation during the holiday season fits in well within this picture.  After the USD heads sideways with a tad of a bearish correction for the next 2-3 months, the USD uptrend can make its next march forward in February, March or April.

In the below screenshot you can see what I am thinking about in more detail: notice how price bounces at the monthly support trend line. Price action is indicated by small greenish bars, which represent small bullish candles. They are then followed by bigger and impulsive bearish (red) candles pushing through the monthly support trend line.

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What if the USD uptrend continues quicker and/or the USD uptrend does not receive follow through in March next year?

As always traders should always remain focused on the price action and follow price wherever it wants to go. Be ready to capitalize on opportunities regardless of the direction and your bias. Every Forex trader will have some kind of bias (impossible to remove it entirely), which allows us to stay sharp and improve our forecasts. Just do not rely on it blindly.

Do not forget to add your opinion in this debate by posting a chat below. What is your forecast for the US Dollar? Do you the same as me or something totally different?

Thank you for sharing this post and wish you all Happy Hunting!

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