Market Sentiment: The Invisible Hand Guiding Forex Prices Market sentiment plays a crucial role in shaping price movements in the forex market. It's essentially the collective mood or attitude of traders toward a particular currency or the broader market. While fundamental and technical analysis provide structure, sentiment reflects emotion — fear, greed, optimism, or uncertainty — often driving prices beyond rational expectations. For example, if traders believe the U.S. economy is weakening, they might sell the dollar even before economic data confirms it. Conversely, positive news can spark bullish sentiment, pushing a currency higher as traders pile in, regardless of current fundamentals. Tools like the Commitment of Traders (COT) report, news sentiment analysis, and social media trends can help gauge how the crowd feels. Ignoring sentiment can be risky — prices can remain irrational longer than expected. Successful traders combine sentiment with other analyses to gain deeper insight and make more informed, timely decisions in the dynamic forex market. #CommunityAMA