Hey folks I am fairly new to forex! Lately I have been going through daily charts and examining why price has moved a certain way using price action and trend lines. Here I have attached a daily of AUD/USD and have put in rectangles what I am confused about. Just curious if anyone could offer an explanation for a n00b like me?
Well, those are from last year and I donβt know what exactly happened, but in general it may have had to do with an economic release or statement by a central bank. The rectangles you placed still show that the price remained in its trend and if you base your strategy on daily charts I would ignore those one-day movements (they do offer a nice opportunity to add to your trades) and stick to the bigger picture.
These things happen mostly due to high fundamental announcements such as NFP,Minimum Bid Rate, Political changes from ECB,FED,governments.
For an example - Favourable annoucement on EU caused EU to rise against USD. But the following day EU dropped against USD due to unfavoarable news.