If the market remembers previous structure it will probably remember previous valuations. This again is something which makes me think academic research about a lack of memory in forex is not true - btw. if you are into statistics, this is not about stationarity.
My feeling is this is computational memory, a powerful residual in the computational structure of the market, revealed in patterns and spikes to those in it. This again is something to bias things in your favor. All these observations seem to work best on longer term time frames in forex.
Let's look at EUR/USD 1 day. Note the precision of the spikes. The structure in May I talked about which stopped the initial surge of EUR/USD is delineated by a spike. The double spike (note how deadly these are) I talked about during the week hit the bottom of that spike.
The market seems to have been making multiple probes around that value. Probes stop trends. But note how powerful that probe was, because the double spike delineates the end of the next surge stopped by the jobs news (so it seemed).
My comments about raising rates come from a feeling not doing so is *damaging* the way the economy works. Remember those pipes, it fills them with something which does not do anything value adding to the economic future of the US.
© 2010 Guy Barry - All Rights Reserved.
