Hello Fellow Traders,
Quick Question, when traders take profit, why does it drive the currency pair up?
Thank you in advance!
SB13
It is due to a short-covering rally and only happens after a currency pair sold off (after a rally it would move lower due to profit taking).
Because Forex Trading comprises of two simultaneous part i.e. When you buy one pair you/someone are also selling and vice versa. Many markets are great liquidity such as EURUSD USDCAD USDJPY etc. so there are no shortages of buyers and sellers.