Wednesday, November 19, 2014 - 07:15
117.50 is our medium-term target for USD/JPY, and it could probably be reached by the end of November.
- Alexander Chepurkó, Chief Market Strategist, HiWayFX
That assertion was made at a price of 113.50 on USD/JPY on 4 November, 2014. 400 pips later and at over a week until the end of November, we're there. The Yen is continuing it's crash against the US Dollar and there is still no sign of it stopping.
Meanwhile, the scenario we outlined for you in EUR/USD for November is also playing out almost exactly as we've planned;
Expect some consolidation in a broad range between 1.2530 and 1.2610. Further into the end of the year, there is a possibility that we test even lower than 1.25 - all the way to 1.2430.
- Alexander Chepurkó, Chief Market Strategist, HiWayFX on 29 October, 2014
Holidays Promise Low Liquidity and Erratic Forex Behaviour
So with all these pips being earned into the end of the year, we think it's time to caution on what the end of year can bring to Forex markets. The last Thursday of November traditionally heralds the beginning of the holiday season in the United States. This day is known as Thanksgiving Day in America and largely involves shopping and planning for the upcoming Christmas and New Year's holidays.
As we move further into December, liquidity will get thinner and thinner, culminating in one of the few days that Forex markets truly close (besides weekends) on Christmas and New Year's Eve. In past years we've seen really erratic behaviour in Forex markets as news headlines come out and spikes take out many traders and cause losses after a successful year.
So keep this in mind and safeguard any accumulated earnings from the year, because the current time period often brings frustration and grief to beginners and pros alike. Remember that there are no missed opportunities in trading. On the contrary, opportunities in markets are infinite! Your trading account is not!
Even so, our charts from the previously mentioned articles will still hold true. The expectations are for EUR/USD to be in a range of about 1.26 - 1.24, with 1.2530 serving as fair value. The Yen will probably reach 120 to the Dollar by the end of the year, but 117.75 is the fair value closest to current prices. If you plan on playing this market, make sure to keep stops tight and trades short.
The information provided is for educational purposes only and should not be considered as investment advice.