It’s Thanksgiving week – a holiday shortened week that is mainly going to effect the turnover in the U.S. but considering that the hours between 8:00am and Noon EST are typically the most volatile for dollar-correlated pairs, this is significant. For this reason and for the reason that we are entering the six strangest weeks of the year (generally speaking) I like to focus on shorter, intraday time frames. Let’s also consider some non-cyclical reasons for this shift. Most of the daily charts in that trade against the dollar are in some sort of sideways range, mainly the somewhat unpredictable congestion that is distribution. That means there is no dominant market psychology on the daily time frame and since the daily is the most psychologically relevant time frame and dictates what the overall impression of the market is, there is essentially no opinion and this is reflected in the previous trends flattening out.
When this occurs, I will adjust and protect myself from the back and forth volatility of distribution by waiting for opportunities on the five, 15, and 30, and 60-minute time frames, with particular emphasis on the five and 15.
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