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Re: Are currency markets random?
I would say that the forex markets are definitely, unquestionably NOT random, even in the short term. This largely stems from the fact that they are not a pure speculative market, and as such not a zero sum game in the truest sense of the word.
Things like daily fixings etc are demonstrably not a random phenomenon. However there's a huge difference between saying something isn't random, and saying it's entirely predictable (which I am certainly not claiming with respect to the currency markets). But I definitely see patterns occurring every day that are non-random.
A few examples;
Central bank intervention in the markets at certain levels;
Daily fixing trades (particularly the midday (London time) Frankfurt fix and the 1600 (again Ldn time)WMR fix)
Daily and weekly squaring up activity (watch how often after a big move on a friday (e.g. payrolls related move), the U.S. evening session will show a steady move the other way, as bank spot desks, futures punters and other short term names square up ahead of the weekend. You also often get movement when the US stock markets open and close (less pronounced than it was a few years ago though).
I could probably list more, but hope that these few have demonstrated my point.
GJ
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