The close of the previous day is a level that some traders watch closely. The belief is that price tends to gravitate back to it, especially when the new day opens with a gap or a quick move away.
For FX, the idea is complicated by the lack of a single close. Different brokers define the day differently, so the close differs slightly between platforms. A level that matters on one chart might be a few pips off on another.
The effect, if it exists, is likely strongest in quiet conditions. On trending or news-driven days, price moves away and does not return.
A test would take the previous close on a defined basis, such as the 5pm New York price, and record how often price revisits it during the next session, and how long it takes.
If the revisit rate is high, the level might serve as a target for fading moves. If not, it is just another line.
Quick poll for the thread: have you checked how often your pair revisits the previous day's close, and does it depend on the session?
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The previous day's close as a magnet
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