What is a retracement in forex?

Solution
A retracement is when a currency pair reverses its direction and moves in the opposite direction of a previous trend.

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Forex pairs usually move in trends or sideways. That is, sometimes, buyers or sellers prevail, and the market is predominantly one-sided and moves in one direction. In such a case, the market is moving in a trend.

Despite this, markets hardly move in a straight line. They usually move in zigzag shapes or waves. Thus, even in an uptrend, you see some downwards pull back movements. This happens because even if the buyers are prevailing, there will be some sellers from time to time, and people have different convictions about where the...
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