A steady climb after a fall:a rally lifts the price for all.
A sustained increase in the price of a currency pair or market.
Rallies can be driven by positive economic data, central bank policy changes, or shifts in market sentiment.
In plain words
A rally is a rise in price that carries on for some time, as opposed to a single jump. The word describes what the price has done; it says nothing about how long the rise lasts.
See it move
Candle 6 of 6: closed above where it opened
Why it matters
The term appears constantly in market commentary, often with a cause attached, such as economic data or a change in central bank policy. Rallies also occur inside falling markets, where they are sometimes called relief rallies.
Worked example
An example only. The figures are round and invented for the arithmetic: they are not market prices.
A pair closes at 1.1000, 1.1040, 1.1070 and 1.1120 on four days in a row.
- 1Day twoup 40 pips. Day three: up 30 pips. Day four: up 50 pips.
- 2Total rise1.1120 − 1.1000 = 0.0120, which is 120 pips.
- 3As a percentage0.0120 ÷ 1.1000 is about 1.09%.
Three higher closes in a row, adding up to 120 pips, would commonly be described as a rally.
A common mistake
A rally is not proof that a market has turned upward for good. A rise within a longer decline can be sharp and still be followed by lower prices.
Check yourself
Educational information, not investment advice or a recommendation to trade.