GAP strategy and horror news from wall street

The GAP strategy and horror news from wall street 

its somehow funny how exactly the same dummies that shouted for a eur/usd 1.70 some weeks ago forecast a level of 1.1-1.2  in the nearer future. In my humble opinion there is no way to tell where the dollar might go in the coming weeks. Yes, its true, the ghost of recession seems to be now also over europe. So now we have recessionary signs in EUR, GB, Japan, New Zealand definetely, and what about the US? The US economy is far away from getting strong again, we might have seen the USD bottom in july this year, but the grade of recovery is still weak and every financial horror news that comes on and on like today with Lehmann and AIG has the power to negiate any stronger recovery at least in the short term. 

I got many questions concerning the GAP strategy on sunday open these days. To make it clear: the GAP strategy is one of the most reliable strategies in forex market. In over 80 % a main GAP at sunday open (15-20 pips at least) will be filled in 24 hours. BUT: GAP strategy is only valid under normal conditions! It is not valid if significant market news are released over the weekend. Then there will be huge GAPs that, however, might never be filled. Two weeks ago Bank of England Governor gave an interview saturday that the UK is in the worst condition since 20 years and GPD/USD of course showed a huge GAP on sunday open (down more than 200 pips), and that GAP was NOT filled. This weekend with the news of hurrican IKE (affect oil price) and Lehmann brothers bankrupcy/AIG problems again brings the market in conditions that the GAP strategy ist NOT valid. EUR/USD and GPD/USD closed the 200 pips GAP in 24 hours, but this was nothing more than luck. USD/JPY didnt close the 250 pip GAP!.