Why Is Liquidity Important in the Forex Market?

Liquidity plays an important role in the Forex market. It determines how easily traders can buy or sell currencies without significantly affecting market prices.

Major currency pairs usually have higher liquidity, while exotic pairs may experience lower liquidity and wider spreads.

Questions:

Why do professional traders pay attention to liquidity?

How does low liquidity affect price movements?

Can liquidity help traders identify important market areas?