The forex gap is a circumstance in which the break-in price is visible on a chart used to evaluate a specific financial instrument. The forex gap, as the name indicates, is defined by a blank space in the centre of two adjacent bars.
A forex gap can emerge when there is a considerable difference between the closing price of the previous candlestick and the starting price of the following candlestick, according to technical analysis. However, from the standpoint of fundamental research, a forex gap may emerge if trader sentiment shows a major movement in terms of price. In certain cases, market players disregard the closing price of the previous candlestick before a forex gap occurs, and no deals are made at the nearest price level. However, most traders agree that the beginning price of a new candlestick after a gap has been detected is important and should not be overlooked.

A forex gap refers to a significant difference between the closing price of one trading period and the opening price of the subsequent period in the foreign exchange market. These gaps typically occur over the weekends or during periods when the market is closed, leading to a noticeable price jump when trading resumes. Forex gaps can be categorized into three types: common gaps, breakaway gaps, and exhaustion gaps.

Common gaps are considered normal price fluctuations and often get filled relatively quickly. Breakaway gaps signal the beginning of a new trend, while exhaustion gaps indicate the end of a prevailing trend. Traders closely monitor these gaps for potential trading opportunities and to gauge market sentiment. Gaps can result from various factors, including economic events, geopolitical developments, or unexpected news that influences currency prices. Traders use gap analysis as a technical tool to make informed decisions about market entry and exit points.