When you initiate a trade in Forex you are trading against Professional traders from banks, hedge funds, and liquidity providers known as market makers. These traders are part of large organizations which employ quantitative experts who write computer programs to automate their trading activities. As these programs enter orders into the market they are executed faster, more frequently, and more accurately than manual traders. This gives them an advantage because there is no human intervention to cause execution errors such as hitting Buy instead of Sell, closing a winning trade early, or letting a losing trade run. These algorithms can be backtested and adjusted by human traders as needed. In addition to reducing trading errors and increasing execution efficiency algo trading reduces transaction costs and improves pricing. Many algo's use mean reversion strategies where orders are gathered from high and low prices before the price moves back to the mean. The algo's can be programmed to weigh volume, average price, etc. or whatever metric is desired. This is how hedge funds reduce market risk in addition to hedging their trades.
The algo's are particularly effective on the down side as sell orders are triggered in a cascading domino effect. Price generally moves up in a slow stair step fashion and when it is time to fall under it's own weight it falls rapidly and some traders can only trade the bull moves and not the bear moves. Our brains are hard wired for excitement and we like to work in crowds of excited participants, not alone when fear is the order of the day. That is one of the reasons that Smart Money has such an easy time letting prices fall under their own weight and they buy as the price is falling through the floor. There is no one else buying as the price falls, most are selling furiously as fear grips them and they want to get out before the bottom. Of course the price always seems to mysteriously bottom out and reverse and move higher again.
Ignoring algorithmic movement in modern financial markets will cost your dearly. Traditional technical analysis needs to be carefully employed while considering how modern algos move price in a never ending mean reverting dance. The algos are programmed by humans and humans tend to do the same things over and over, especially if it works effectively. Observing the algorithmic movement will help you negotiate the order flow if you consider where and when traders are being trapped into bad trade locations based upon general market conditions, fundamentals, news, and market structure.