Retracement is a common phenomenon in the forex market, where the price of a currency pair temporarily moves against the overall trend. For example, if the trend is bullish (meaning the price is generally increasing), a retracement could occur where the price temporarily decreases before continuing to rise. Retracements can occur for a variety of reasons, such as profit-taking by traders, a change in market sentiment, or the influence of external events. They can be identified using technical analysis tools such as Fibonacci levels, and traders may use retracements as an opportunity to enter the market or adjust their positions. It is important to note that a retracement is not the same as a reversal, which is a change in the overall trend.