Major US Dollar appreciation made our Breakout and Trend-following trading systems top performers through recent trade, as these strategies quickly bought into US Dollar rallies. Volatility expectations have nonetheless dropped noticeably ahead of the holiday-shortened trading week, and these holiday periods tend to produce especially unpredictable price action. Illiquid market conditions can make for extremely choppy price action and exaggerated market moves. Indeed, traders should exercise particular caution-especially because the quality of trade execution tends to be poor through illiquid markets.

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Forex Strategy Outlook: Caution through Holiday-Shortened Week