Currency Trading: One Year After Lehman Brothers Collapse
I never realized that today, was 1 year after the fall of the legendary investment bank, Lehman brother. That started the main financial troubles of the global economy. I am not a historian (just someone that likes trading online), but I decided to look back at history. I wanted to see how the Lehman brother news affected currency trading.
I looked at the charts of 2008, and I noticed that the news broke out in the weekend meaning that the market was closed at that time. When the market opened, all the 4 currencies I like to watching (EURUSD, GBPUSD, USDJPY, GPBJPY) had a gap in them. Since the news was bad for dollar, all the currencies pairs that were ending in USD had a gap when the currency market open for the week. And all the currencies pairs starting in USD had a gap down.
In relationship to how many pips a pair can move in a day, I can say the biggest gap among the pairs I watch was USDJPY, and the biggest among other pairs was USDCHF. You can see what I am saying from the attached graph.
The USDJPY moved about 70 pips downwards when it opened. That was a lot of movement regarding that it has a daily range of about 100 pips. I am sure the daily range has changed because the financial troubles in the stock market has increased the volality in the foreign exchange (forex) market.
The gap was closed towards the end of the trading day, and that saw the fall of USDJPY. The currency pair hasn’t reached the price 106.63, the opening price of that day yet. But other currencies had either pass their opening price and falling down or they fell down and surpass the opening price of that day.