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.