When Does Technical Analysis Fail?

Technical analysis fails when traders fail to consider the fundamentals. Why mention fundamental analysis when explaining technical analysis? Simple, the one just doesn’t work without the other. Fundamental factors such as political events, a hike in interest rates, unemployment rates and so on will impact the Forex market more substantially than perhaps any other market. Fundamental factors are often the driving force of major price movements. A trader focused on technical analysis

Cannot ignore Nonfarm Payroll on the first Friday of the month and expect his or her technical indications to be as accurate as the day prior. Notice the price movement shown in the following image; shortly after Nonfarm Payroll price reactions were wild; during such times technical analysis cannot be counted on.