I thought Forex had no gap downs

Discussion in 'Forex' started by uninvited_guest, Sep 18, 2005.

  1. I thought Forex had no gap downs. Just now the EUR took a huge drop, 70 pips, at open agianst the USD.

    I see that the EUR dropped big time at open against all the currencies. Whats up?
  2. forex can have gaps ... as there is no real market

    between friday later afternoon EST and sunday afternoon / eve EST

    so if there is a "news" driven event that
    happened between those points in time

    viola ... " gap "
  3. It can gap at any time, especially over the weekend.

    The reason today is the German election result - it looks like there will be a grand coalition - should be the worst possible scenario for the euro if it is confirmed.
  4. 800 pips gaps have happened over the weekend in FX in the past.
  5. Plus there are huge stops below 1.22 and things are headed that way anyway. I was short into the Friday close, but chickened out and covered my trade.

    Anybody know if there is any "confirmed" election news yet?
  6. Only exit polls so far.
  7. Be really careful with this level. There was some big buying going on on Friday protecting the 1.22 level. If it truely is a breakdown here then the bear flag that has been developing will be confirmed as the bottom of the daily uptrend channel will have been violated substantially and a move down cometh. BEWARE of a re-entry into the channel, false breakout here on light flows and news.
  8. I havent trade with fxcm for over a year but still have their platform. If their prices are to be believed cable is more volatile than the euro at the moment. Moving up and down in 40 pip gaps.

    For what its worth I think the Euro is a raging sell on this news, if confirmed.
  9. Election: Exit Polls Suggest "Grand Coalition" Likely] Sydney,
    September 19: According to exit polls it appears that Merkel"s Christian
    Democrats will edge out the Schroeder led Social Democrats by a narrower than
    expected margin of 35.5% to 34%. With Merkel"s preferred partner the Free
    Democrats showing 10.5% in the exit polls it appears that Merkel can not form a
    governing coalition. The likely outcome would be a "grand coalition" with the
    Social Democrats without Schroeder. If the exit polls hold up and the "grand
    coalition" was to be the outcome it would weigh on the EUR/USD and German
    equities. The market started to price in the possibility of a "grand coalition"
    last week, but the EUR/USD bounced slightly on Friday when pre election polls
    showed her party with more that 40%. A provisional official result will not be
    known until after midnight local time (2200 GMT), although German television
    will progressively update projections of the result. --John.Noonan@thomson.com
  10. Euro is very offered just below the figure - every time it goes 80 bid it is spanked. rather strangely Euro Swiss is so far unaffected...time to play!
    #10     Sep 18, 2005