Forextraplaces - the week ahead - EUR/GBPIt's a well know market phenomenon that gaps in the market are inevitably always filled.
The market hates gaps.
No-one seems to know why but its simply a fact.
When the markets opened last Sunday (UK time) EUR gapped open across many pairs.
EUR/USD 25 pip gap - filled.
EUR/JPY 28 pip gap - filled.
EUR/CAD 26 pip gap - filled
EUR/CHF - no gap
EUR/AUD 37 pip NOT filled.
EUR/NZD 42 pip gap NOT filled.
These last 2 trading pairs have been in a steep decline since the end of April and show no signs of reversing so the gaps in these markets may not bve filled for some time but EUR/GBP is the pair to look at.
I expected this gap to have been filled last week particulalrly as GBP was largely BEARISH but this did not happen.
I expect that this gap WILL be filled this week.
Key is .8842.
If we see the price of EUR/GBP break .8842 (where I have a SELL STOP) , I expect the price to close the gap and then reverse sharply.
This will need to be done before Friday as the EURO PMI numbers will most likely set the direction of the EUR and these are due on Friday.
So look to get LONG on this pair and see if the gap is filled but be mindful that the overall picture for is pair is BEARISH.
