Basic Economic Principle of Supply and Demand

Bears, Resistance, and Supply
As we have stated, the movement of financial markets is simply the continual unfolding of the battle between bulls and bears. Bulls, or buyers, are trying to push price up, and bears, or sellers, are trying to push price down.
When the bulls are in control of the market, they are pushing price up, but at some point, price will find resistance. Resistance is when enough sellers come into the market in order to fight off the bulls. At this point sellers begin to push price back down.
When price is rising in t, buyers are in complete control of the market. When price gets up to a certain level, all of a sudden buyers are exhausted. They cannot push price any higher. There are enough sellers at that price level, that pressure is put on the bulls, and the bears begin to push price back down. This means that supply has come into the market in heavy fashion. At the top of the price curve, there is a substantial supply of this currency pair, and there is not enough demand to absorb the excess supply. Therefore, price falls.
Bulls, Support, and Demand
In the most common scenario, sellers are in complete control of the market as price falls to the equilibrium. When price comes to the equilibrium, all of a sudden bulls, or buyers, come into the market with substantial demand for the currency. All of a sudden, there is more demand for the currency pair than there is supply of it in trading, so price begins to rise nicely, and the bulls take control of the market.
This battle between bulls and bears never stops. Identifying price movement as a battle between bulls and bears helps in understanding the market psychology that is driving price movement. The key to swing trading is being able to identify when the bulls are about to lose momentum and the bears are going to take over. If you are able to identify these a specific price level on the chart where you believe bears are about to be in control of price, then you will be entering a short position.
Conversely, if you are able to identify price levels where the bulls are about to take control of the market, you would enter a long order. This basic economic principle of supply and demand is what drives currency prices.