I am trying to decompose and forecast a weekly time series which is believed to be affected by moving holidays (e.g. Chinese New Year, which happens in different weeks of a year). I would like create a regressor variable to reflect the holiday effect on the series. Is it correct to use the regressor variable as xreg in forecasting stl object / stlf?
Also, I would like to know the difference between the following methods, and whether they are doing the job I wanted.
1) decompose using stl, then forecast the decomposed object, i.e.
2) use stlf directly, i.e.
Thanks in advance