Flat is a market phenomenon when a trading pair is within a certain range of the price movement.
- expanding flat
- tapered flat
Most of the time in the Forex market, trading pairs are in a flat state, this can be attributed to the fact that the very essence of the monetary policy of most national banks in the world is interested in the stability of the exchange rate, both the national currency and the global world currencies, the US dollar (USD).
The focus of central banks towards “exchange rate stability” comes from part of the psychological component of human behavior, most people want to have stability for the accumulation and preservation of capital.
It is also worth noting that the flat nature of the price behavior of some currency pairs is due to the presence of a strong correlation dependence. These factors may be the result of a close relationship in economic terms and some. other factors.
The most flat currency pairs on the market include:
- AUDUSD and some others.
- steady flat
- Tapering flat
- Expanding flat