Tomorrow our
American friends will celebrate Thanksgiving, and we would like to take this
opportunity to send them, and everyone else, the very best wishes for the
holiday. As far as the Forex market is concerned, there is now a distinct sense
of a vacation atmosphere. This began at the end of last week and can be
expected to continue for the duration of this one, and even into the start of
next week, which sees the European Central Bank (ECB) monetary policy statement
on Thursday, with the all-important U. S. Non-Farm Payrolls report on Friday.
Both of
these will be highly anticipated and closely watched on this occasion.
Mandelbrot stays out of the market
for Thanksgiving
We have been
out of the market this week. As mentioned above, the holiday atmosphere might
be expected to result in the type of thin, choppy trading that is not conducive
to profits.
But we do
not have to rely on gut instinct - we can also measure the state of affairs by
analysing a trading indicator, the Average True Range, or ATR, which is a means
of measuring volatility.
An indicator
like this can be looked at in terms of rising or falling trends, in exactly the
same way as the exchange rate chart. As can be seen above, the ATR on the
hourly chart of EURUSD indicates a series of lower highs and lower lows, dating
from the last two days of last week, which is the classic definition of a
falling trend. So Mandelbrot keeps its powder dry.
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