Friday October 18, 2019 - 09:28:35 GMT
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Forex Alert: Beware of a Gap Opening
Event risk is sky high with the UK House of Commons due to vote Saturday on PM Johnson’s Brexit deal. With the outcome seen as too close to call the only thing that seems certain is that GBPUSD and GBP crosses will gap higher or lower at the start of next week’s trading.
Forex brokers are already preparing for the risks associated with a gap opening and volatility as can be seen by the following sent by a global broker.
Please be advised that we will be adjusting GBP FX pairs leverage to 1:33 (3% margin requirement) over the weekend, which will come into effect GMT+3 Monday 21st October 2019. This is in anticipation of increased volatility surrounding the Brexit process.
Please ensure your account(s) has sufficient margin to cover any GBP pair positions you may be holding.
So be on alert for changes in leverage by your broker and prepare for a wild start to the week.
If I was in the Bank of England’s shoes I would be closely monitoring the price action to smooth any violent price swings, especially on the downside if such should occur.
If I was in a trader’s shoes I would have access to the Amazing Trader with a strategy designed to have you trading on the strong side of the market High Odds Trading
In any case, expect a gap opening where liquidity will be poor and spreads will be wide until the market adjusts to the Brexit vote outcome. If the agreement is voted down the key will then be whether Johnson forges ahead with a threat of a no deal exit on October 31 or seeks an extension.
Jay Meisler, co-founder
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