We started the week off with a huge 180 pip gap on GBP/USD.
British Prime Minister Theresa May had spooked Cable longs speaking about a hard Brexit over the weekend and price gapped accordingly.
But with questions over just why a hard Brexit that we know is coming would be so bearish and price down at swing lows that we bounced off following the now infamous flash crash, we were happy to look for longs.
By the end of Tuesday’s trading session, the gap had filled and then some.
Can’t complain when setups play out like this!
With Monday’s GBP gaps still in play on Tuesday during Asia when this blog was written, we simply asked the question: When is a gap filled?
While still speaking about Cable longs into the gap there, it would have been crazy to take opposing setups but the way that price reacted to each part of the gap was too good not to highlight.
Just like GBP/USD above, price filled the gap and then some.
Gap fill traders having a field day on that self fulfilling prophecy.
With no blog on Wednesday, we skip to Friday’s EUR/USD setup anticipating a Draghi bounce.
Draghi kept rates and stimulus on hold as expected and while this wasn’t exactly the hawkish shock that we were playing for, most importantly it wasn’t dovish enough to change our bullish bias on EUR/USD.
With that daily support level having held, I have highlighted a possible intraday pullback into short term support that could be used as a buy signal.
We’ll let this one continue to play out but the levels are all there.
Enjoy your weekend!
Dane Williams – @VantageFX
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