Bull Market

A bull market is a period of sustained price increases. For a forex pair like GBP/USD, a bull market means the pound is gaining ground against the dollar. Bull markets tend to attract more retail participation because buying feels natural — prices are going up, and you want to ride the wave.

Bull markets in currencies form for the same fundamental reasons bear markets do, just in reverse: strong economic growth, rising interest rates, positive trade balances, and investor confidence in a country's economy. The Australian dollar's strength during commodity booms is a classic example of fundamental-driven bull runs.

The trap in bull markets is assuming they'll last forever. Trends end, and the longer a bull run continues, the more vulnerable it becomes to correction. Smart traders focus on risk management even when everything seems to be going their way, because reversals in forex can be swift and severe.