Further to yesterday's article, we still ponder whether the gap open is a "runaway gap" or of the "exhaustive" variety—each with very different implications for economies and financial markets. Today's price action (still to complete) adds to the uncertainty. Current price action shows a small ranged "inside day" candle. I.e., within yesterday's high and low. This indecision indicates uncertainty; the bulls are not taking prices higher, but at the same time, the bears are not convinced that prices should be heading lower.
Moreover, the West talks about sanctions extending to the Russian energy markets and the Russians threatening to "turn off the tap" in retaliation for the imposed sanctions. As a result, the market is overbought with an exceptionally steep gradient. However, oil remains a critical x-factor. If supply shocks continue, it's high stakes, with stagflation a distinct possibility.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.