Major currency pairs gaps on weekend news; US Dollar weaker
Several major currency pairs opened trading with forex gap today (start trading with a gap from Friday’s closing price). Shown in charts below AUDUSD, EURUSD, GBPUSD. Other pairs include USDCHF and USDJPY. Most pairs run into some form of resistance or support but GBPUSD appears technically strongest.
What was the reason for the gapping price action?
Frontrunner for Fed chair Larry Summers pulls out of race
Larry Summers, the apparent frontrunner to succeed Ben Bernanke as the next chairman of the US Federal Reserve, has pulled out of the race in dramatic fashion.
Mr Summers, a former US Treasury Secretary and policy adviser to Barack Obama, on Sunday phoned the US President to notify him that he no longer wanted to be considered for the most powerful role in central banking.
His shock withdrawal appears to place Janet Yellen, Mr Bernanke’s second-in-command, in pole position to win the President’s nomination.
The dollar fell on the news, with the value of a pound rising from $1.588 to $1.595.
But the most important questions forex traders will ask
A. Will those gaps be closed? (Kiwi dollar pairs close their gaps within 24-hours last month)
B. Will US bomb Syria?
C. To taper or not to taper?
D. Is sashimi safe to consume?
E. Will ‘rare’ forex gaps happen every week from now on?!
Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’. Operates multiple strategies.
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