Long-term trends

Currency markets often move in visible long-term trends. Although currencies do not
have an annual growing season like physical commodities, business cycles do make themselves felt.
Cycle analysis looks at longer-term price trends that may rise from economic or political trends.
"Buy the rumor, sell the fact"
This market truism can apply to many currency situations. It is the tendency for the price
of a currency to reflect the impact of a particular action before it occurs and, when the
anticipated event comes to pass, react in exactly the opposite direction. This may also be
referred to as a market being "oversold" or "overbought". To buy the rumor or sell the
fact can also be an example of the cognitive bias known as anchoring, when investors focus too
much on the relevance of outside events to currency prices.