Friday, December 30, 2016

Euro 15-Minute Chart; Flash Spike and Flash Crash

At 6:20 PM EST Thursday evening, 12/29/16, in the States (11:20 PM London and GMT; 12:20 AM Frankfurt Friday morning; 7:20 AM Hong Kong; 8:20 AM Tokyo), the euro flash spikes from 1.048 to a high print at 1.064 in a couple minutes time a move of over +1.5%. Several platforms show a high print at 1.07. Once price tagged the 1.05 resistance, the algo's kicked into high gear shooting the euro to 1.07. The euro then flash crashes down to 1.055 and trends lower to 1.052. The spike higher may not seem particularly large at +1.5% but for currencies and the Forex markets this is a big move. Those looking for euro parity with the US dollar are busy wiping egg off their faces this morning.

Thin liquidity and overactive algorithms are blamed for the mysterious spike. Humorously, algo's are now targeted as the bad boys in the markets and blamed when anything  goes awry. Other currencies such as the Japanese yen and Swiss franc tickers react to the move. As US traders rise from slumber, the euro is making its way higher towards the spike high level.

Is perhaps a flash crash ahead for global markets in 2017 as computers take over more and more trading activities from humans? This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note:  The chart is provided courtesy of a very useful site for market information. The chart is annotated by Keystone.

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