A correction in the Forex market is a return, or a rollback in the opposite direction, to at least 10% of the previous movement of the currency pair. A correction is usually a temporary decline in a currency pair that interrupts its uptrend. The correction depends on the time frame (timeframe), since depending on the long period, the correction can be either a pullback or the trend itself (in the short term - a correction, in the long term - a trend).

More clearly, the correction can be traced on the example of indexes. One of the ways in which market analysts try to predict the appearance of a correction is to compare one market index with another similar index. For example, if the British FTSE 100 starts to sink, the American S & amp; P 500 may follow this example.

When the market shows a tendency to lower closing prices, we can talk about the presence of a correction. Nevertheless, a correction in the market as a whole is not necessarily a signal of a weakening of a particular position of a currency pair. Currency pairs can remain strong.