Corporate and institutional flows will dry up from today
Many institutional and corporate players will be taking a full two week break from the FX market and with politicians also less likely to make any earth-shattering decisions during this period, any moves will be mainly speculative and driven by lack of liquidity.
Overall positioning is at slightly below moderate levels, according to snippets of information I can glean from Prime Broker reports, so we should not see any massive stop-loss driven spikes. Liquidity is generally being referred to as ‘appalling’ and that situation won’t change this side of January 5th.
One potential spanner in the works is EUR/CHF, with the SNB support line likely to come under massive pressure now that the negative rates move had such little impact.