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A lot of the banks have to finalise their end of year accounts, both for the regulators and the shareholders. The next few days in the markets will be driven by balancing the trading books. (This balancing only means within the banks predetermined levels, so if the traders have over extended say oil futures they have to sell down to within the banks allowed holding level, or the regulator fines them) This does not apply to Forex as they account for this in a different...Ignored
In addition to year end, it is also quarter end and end of delivery months for certain futures contracts.
With regard to forex, the market usually balances out by the second week in January. This is also due to year end but mainly due to Europe being on holiday until January 4th and New York still partying.
There have been years when BOJ took advantage of this so be cautious of any JPY pair moves if you have to trade during this period.
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