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- The week in FX and Crypto: October 21, 2025
The week in FX and Crypto: October 21, 2025
Framework-Based Structure Analysis. Educational Only.
mark schaefer
October 21, 2025
In This Issue:
Last week's market moves: USD -100 pts, EUR +186 pts, GBP/AUD +370 pts
Volatility measurement: Why I use Bollinger Band Width
Multi-timeframe conflict: Range trading the USD complex
Subscriber Poll: Please share your ideas for future issues!
Market Structure Update
USD Index - Early-week bearish reversal candle combined with overbought momentum led to a 100-point drop to 97.80. Textbook momentum reversal structure.
EUR/USD - Double bottom at 1.1542 with oversold momentum produced a 186-point rally to 1.1728.
GBP/AUD - Clean breakout above 2.0480 resistance extended over 370 points to 2.0850. Momentum confirmation after the channel break.
Note: These measure market reactions from flagged levels, not trading results. Implementation varies by individual approach.
VOLATILITY MEASUREMENT: WHY I USE BOLLINGER BAND WIDTH
I use Bollinger Band Width (BBW) to measure volatility. It's simple and tells you what you need to know about market regime.
Why It Works:
BBW measures the distance between Bollinger Bands. Narrow bands = low volatility = range-bound markets. Wide bands = high volatility = trending markets.
Extreme BBW compression (the squeeze) signals coiling—volatility is suppressed and a breakout is likely. You just don't know the direction yet.
Current Setup:
The weekly USD Index chart below shows BBW at multi-year lows. This level of compression hasn't been seen in years.
The market is coiled. Range trading works until the break.
For educational purposes.
USD Index Weekly
USD INDEX & MAJOR PAIRS: MULTI-TIMEFRAME CONFLICT
The USD Index and its major crosses (EUR/USD, GBP/USD, USD/CHF) are all telling the same story right now—and it's an indecisive one.
The Setup: Weekly timeframes show price, momentum, and structure pointing in one direction. The daily charts tell the opposite story. This is textbook multi-timeframe conflict.
Why It Matters: When you see this type of alignment across all USD pairs simultaneously—everyone indecisive at the same time—it creates a specific trading environment.
What Happens Next: Range-bound markets. Price trades between defined levels while both timeframes battle for control. This is where range trading strategies work—fade the extremes, wait for mean reversion.
The Framework: Multi-timeframe conflict signals a shift in approach. Trend-following strategies wait for alignment. Range strategies activate—buying support, selling resistance, taking profits quickly as price oscillates between levels.
Right now, the USD complex is setting up classic range conditions. Identify the boundaries and trade accordingly.
For educational purposes.
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Meridian Compass is brought to you by Mark Schaefer, a quantitative portfolio manager with over 30 years experience developing and trading systematic strategies in global futures and FX at major banks and hedge funds.
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