Principle number 2:
Price action discounts everything.

This principle states that the price action, the price chart, reflects all known information.
The information may be fundamental information that is economically related, political, environmental, psychological, or any other information that may cause the market to move either up or down.

For example, an increase in the interest rate of a currency may cause demand to be greater than supply, and as a result, the price on the chart will follow an upward path, forming a series of higher tops and bottoms.
Elections may also cause prices to move in an expectation of political stability and growth. Again, demand will be greater than supply, and prices will rise.
A prolonged drought in a country that relies mainly on agriculture it is expected to cause supply to be greater than demand regarding their currency.
Once again, this will be evident on the price chart as a series of lower tops and bottoms.
Last but for sure not least, the sentiment of the crowd, of the market participants, may pull prices higher much higher without anyone being able to justify it.
This is what is also known as a bubble.
Once more, if demand is greater than supply then it is expected that prices will rise.
On the other hand, if supply is greater than demand then it is expected that prices will decline.

The technical analyst is not concerned with the information per se and what really causes the market to move but, on the contrary, is concerned with the impact of the information. That is, whether the market is moving upward, downward, or sideways.
So, if everything that moves the market is reflected in the price, then the price chart study will show the way.