The year 2022 began with an unexpected wave of volatility across the foreign exchange markets. Inflationary pressure — which had been building since mid-2021 — finally pushed major central banks to act.
The Federal Reserve, Bank of England, and even the European Central Bank signaled tighter policies, surprising traders who expected a slower response. This sudden change triggered large currency movements:
The U.S. dollar (USD) surged to a 19-month high.
The British pound (GBP) jumped after rate hikes by the Bank of England.
The euro (EUR) initially weakened before recovering on hints of ECB tightening.
Emerging market currencies, particularly the Turkish lira and Brazilian real, experienced sharp intraday swings, as traders scrambled to adjust their positions.
Elin Andersson’s Take: “Volatility Rewards Discipline”
For Elin Andersson, an experienced forex trader at Nexa Level X, these turbulent weeks were the perfect test of focus and adaptability.
“When central banks surprise the market, the worst thing a trader can do is react emotionally,” says Andersson.
“I focused on trading only the clearest setups — mainly USD/JPY and GBP/USD — and avoided overtrading.”
Elin relied on price action confirmation and macroeconomic context, combining technical and fundamental strategies.
“You don’t need to catch every move,” she explains. “You just need to understand why the move is happening — and when to step in.”
By the end of February, Andersson’s selective trades brought a steady gain of 5.27%, while many traders struggled with stop-out volatility.
Lessons from Early 2022
The start of 2022 reminded traders that central bank policy shifts remain one of the most powerful forces in forex. Markets that seemed predictable in December 2021 turned chaotic in just a few sessions.
“Those weeks showed the importance of preparation,” Andersson concludes. “If you understand the big picture, even unexpected events can become opportunities — not threats.”
