London close reversals
Posted: Wed Oct 28, 2026 5:02 am
Around 4 PM London time, European desks wind down, the WM/Reuters fix passes, and positions get squared. Price often shows a distinct behaviour: a move into the fix, then a reversal or a fade as flows end.
Some scalpers focus on this window, expecting the day's trend to pause or reverse. The behaviour isn't reliable, and on trending days, momentum often carries on through the close.
Reasons for the reversals include profit-taking by European traders, the unwinding of intraday positions, and rebalancing flows around the fix. Spreads widen modestly as liquidity providers manage end-of-day inventory.
A test across a year would mark each day's price at 3:30 PM London, the high or low between 3:30 and 4:30, and the price at 5:00 PM. Statistics about reversal frequency by pair and by trend strength would emerge.
The result probably varies by pair and season, and may differ between months with a lot of data releases and quiet ones.
Trending days produce a different pattern. When the day's move has been strong and one-directional, the close often sees continuation as late flows join. Distinguishing the two scenarios in advance is the hard part, and a trend-strength filter, like the ratio of net movement to total path length for the day, may help.
Has the London close shown a consistent reversal tendency in the data, or does it depend on the day's trend?
Some scalpers focus on this window, expecting the day's trend to pause or reverse. The behaviour isn't reliable, and on trending days, momentum often carries on through the close.
Reasons for the reversals include profit-taking by European traders, the unwinding of intraday positions, and rebalancing flows around the fix. Spreads widen modestly as liquidity providers manage end-of-day inventory.
A test across a year would mark each day's price at 3:30 PM London, the high or low between 3:30 and 4:30, and the price at 5:00 PM. Statistics about reversal frequency by pair and by trend strength would emerge.
The result probably varies by pair and season, and may differ between months with a lot of data releases and quiet ones.
Trending days produce a different pattern. When the day's move has been strong and one-directional, the close often sees continuation as late flows join. Distinguishing the two scenarios in advance is the hard part, and a trend-strength filter, like the ratio of net movement to total path length for the day, may help.
Has the London close shown a consistent reversal tendency in the data, or does it depend on the day's trend?