Forex news that only move in one direction
You're referring to a phenomenon in the foreign exchange market where certain news events or market conditions can cause currency prices to move in a consistent direction, often with a high degree of accuracy. This is sometimes referred to as a "one-way market" or a "directional market."
There are several types of news events or market conditions that can create a one-way market in the forex market:
- Central Bank Intervention: When a central bank intervenes in the foreign exchange market to buy or sell a currency, it can create a one-way market. For example, if a central bank decides to sell a currency to weaken its value, it can lead to a sustained decline in the currency's value.
- Economic Data: Strong or weak economic data can create a one-way market. For example, if a country releases strong GDP growth data, it can lead to a rally in its currency, while weak data can lead to a decline.
- Geopolitical Events: Geopolitical events, such as wars, sanctions, or natural disasters, can create a one-way market. For example, if a country is hit by a natural disaster, it can lead to a decline in its currency's value.
- Market Sentiment: Market sentiment can also create a one-way market. For example, if a large number of traders are bearish on a particular currency, it can lead to a sustained decline in its value.
- Technical Indicators: Certain technical indicators, such as moving averages or trend lines, can also create a one-way market. For example, if a currency is trading above a key resistance level, it can lead to a sustained rally.
Some examples of one-way markets in the forex market include:
- The Swiss franc (CHF) strengthening in response to safe-haven demand during times of market volatility.
- The Japanese yen (JPY) weakening in response to the Bank of Japan's monetary policy decisions.
- The US dollar (USD) strengthening in response to strong economic data or a hawkish Federal Reserve.
- The British pound (GBP) weakening in response to Brexit-related uncertainty.
It's important to note that one-way markets are not always predictable and can be influenced by a wide range of factors. Additionally, even in a one-way market, there can be periods of volatility and reversals, making it important for traders to remain cautious and adapt to changing market conditions.