Mind the Weekend Gap
Skerdian Meta • 2 min read
Whoever was watching the market last night when the Tokyo session started must have noticed the gap in almost all USD pairs. GBP/USD opened with a 60 gap lower. USD/CAD opened with a gap lower as well, while EUR/CHF opened with a 30 pip higher. The GAP in this last forex pair made us happy last night because the buy forex signal we had in this pair closed with a profit bigger than the original take profit target.
I don't know about your broker, but mine allows profit bigger than the original target when the price opens with a gap in my favour and vice versa.
We can't complain about this lovely gap here which gave us 32 pips.
Anyway, USD/JPY opened with a massive 100 pip gap higher. The safe haven currencies were the ones which suffered the most; USD/CHF has surged about 100 pips higher since Friday's close, while USD/JPY opened with a 100 pip gap higher and has now stretched it to more than 150 pips.
If you read the weekly review, which we usually publish on Sunday, we warned you about the dangers of keeping positions open during the weekend. The US election campaign might bring us all sorts of surprises. You might get lucky sometimes, same as we did with the EUR/CHF signal last night, but it might have gone the other way round as well. You cannot predict anything nowadays, at least until the elections are over.
It's hard trading forex in such market conditions, particularly with short term forex signals. The moves are large enough to whipsaw us. Therefore, long term signals are the best way to trade right now. We have our sell EUR/USD long term signal on, but I'm afraid we might have lost the chance to get long on USD/JPY. I don't like to chase trades and the risk/reward ratio in this forex pair does not suit my risk appetite, but if it does it for you, then here is a trade idea: long USD/JPY.