Factors Affecting Sideways Movement
In forex trading, there are terms trend and sideways movements. What factors affect the sideways movement in forex. We will discuss this on this occasion.
Under certain conditions, price movements can last for several days such as bullish and bearish, but it is possible that the price will move within a short range. The price will move up and down as if it is not clear whether it is bullish or bearish.
This is usually caused by several factors, namely:
Market is on holiday
When the market is on holiday such as a national holiday, policies or economic data are not issued at that time so there are no factors triggering price movements. This condition, of course, makes prices uncertain. The possible trend is that the price moves sideways and is difficult to predict.
Fundamental Conditions Are Equally Strong or Weak
When the economic data of two countries are both strong or weak, prices usually move in a short range. The market will usually wait for a more appropriate moment to trade. Equal strength or weak data makes people hesitant to speculate. Therefore sideways movement will usually occur.
Waiting for Economic Policy
As recently happened when GBPUSD was in turmoil because on the one hand USD data was waiting for a policy to increase interest rates as well as the weakening effect of the global economy, on the other hand GBP experienced problems with the Brexit deal, causing the price of GBPUSD to enter a sideways position in a few weeks.
The market is still waiting for a good signal on the Brexit deal at the British parliament level in order to read the economic opportunities in the future. In addition, people are also reading policy signals from The FED in 2019 whether they are still optimistic about the strength of the economy, especially during the trade war between China and America.
Those were 3 factors that have an influence on sideways movements in forex trading. Even in uncertain economic conditions, traders can still take profits in the short term by taking advantage of support and resistance areas. Oversold and bought positions in the sideways area are often used to take short-term profits. Therefore, deepening scalping or daily trading techniques is an option that must be done.
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