Tomorrow brings the Thanksgiving holiday in the United States, and this will likely bring on some form of diminished liquidity across Foreign Exchange markets. And while lower liquidity can, possibly lead to bigger moves; this isn’t necessarily a ‘good thing’ as those larger moves can be considerably more erratic in nature. We’ve already started to see some evidence of holiday markets this week as prior trends in EUR/USD or the U.S. Dollar itself have been digesting prior moves while sticking to rather minimal ranges.

But that may not last… Today at 2PM brings FOMC minutes and tomorrow morning brings the release of ECB meeting minutes from last month’s rate decision that saw the bank extend their QE program. The release of ECB minutes could be especially interesting given the decision that was made; as this can add some clarity around the bank’s thinking while giving market participants some element of lead-in to what the bank is looking for next year.

While minutes releases are pretty far-away from a sure-shot of volatility, the fact that these are being released in what will likely be lower-liquidity markets make the prospect of short-term trading around each rather dangerous. So, rather than looking at short-term trade setups in the effort of catching entries around news events in holiday-quiet markets, we’re going to take a step back to look at longer-term setups in some key major pairs below. These could still be actionable should the situation present itself; but given that the propensity for ‘weird stuff’ happening increases around these traditionally quieter times, we’re taking a more selective route towards taking on exposure.

The U.S. Dollar

The Greenback remains in limbo, and we looked into the varying trends relationships behind the Dollar in yesterday’s article. The longer-term trend, starting in 2014 remains bullish. The intermediate-term trend that started at the beginning of this year remains bearish. And the near-term trend is in some form of transition where it appears as though markets are trying to pick a side; hence, our current state of limbo.