The Telegraph
GOOD EVENING STEEMIT!
Back down the forex wormhole we go!
Today’s blog isn’t really a trade setup, but more a hindsight look at how price can react around weekly opens, especially if we’ve gapped down.
Bring up your EUR/USD charts and join me? :)
I’m going to do things in reverse today, starting with an intraday chart and then zooming out. Starting with the 15 minute:
EUR/USD 15 Minute
To the left, we’ve got last week’s huge FOMC driven drop, or USD rally as they signalled their hawkish continuation towards monetary policy normalisation (buy Bitcoin). This then runs straight into the gap down that we opened up with for the week to the right.
What I wanted to highlight in this blog was the way that price gaps tend to act with an almost magical magnetic pull. Look how price rallied as soon as the market opened, all the way to the gap.
It missed the fill by a couple of pips, but there’s no doubting that magnetic pull!
Now working backward, let’s zoom out to a higher time frame chart just for context:
EUR/USD Weekly
The weekly chart just shows the range at the bottom that formed and has now broken out.
I’m going to refrain from making any longer term calls because that isn’t the way I trade, but I’m sure you’ve all got your own opinions which you’ll be more than happy to share with me in the comments section below.
Peace!
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