Market sentiment reflects the collective mood of traders and investors, driving price movements in the Forex market. Bullish sentiment signals optimism, pushing prices higher, while bearish sentiment shows pessimism, driving prices lower. To gauge sentiment, pay attention to news headlines, economic reports, and indicators like the Commitment of Traders (COT) report. Tools such as the VIX (volatility index) can also provide insights into risk appetite. Understanding sentiment helps you anticipate potential reversals and align your trades with the broader market direction. However, always combine sentiment analysis with technical and fundamental strategies to make informed decisions. Trade with the flow of the market, but be prepared to pivot when sentiment shifts.