Technical analysis will not work when fundamental factors or economic data becomes the main focus of the market as participants become sensitive to any developments.
News Releases With speculation mounting on the possible outcomes, fundamental news releases like US non-farm payrolls have created situations in the market that do not adhere to technical analysis as volume and volatility spikes. Although the aftermath more than not will once again adhere, the mass speculation that ensues makes sure that traders are scrapping for the best price available in filling their positions rather than applying your everyday moving average or price oscillator.
Central Bank Intervention Central bank intervention can also throw a "monkey wrench" into the best technical analysis. The Bank of Japan serves as an excellent example. When the Bank of Japan intervenes, the main objective is to not only adjust spot prices but also to make sure speculators are flushed out. As a result, bank officials will place entries in unlikely levels, thereby ultimately establishing a support or resistance level. Once intervention efforts are spotted, volatility once again spikes as speculators will attempt to be captured in a momentum trade and others attempt to exit at the best price available.