Supply and demand doesn't always apply. As price action trumps everything which we see. Not many people can actually read price action. Which is why so many of us fail! If the market was as simple as supply and demand, then everyone would be earning massive profits day in and day out.
What do you think make price action work?
Supply and demand.
Example. If XXX/XXX drops to 1.30000, it is concidered cheap, and a lot of people will buy it. The demand to buy increases, and there aren't so many sellers around. The price goes up.
If XXX/XXX goes to 1.50000 it is concidered expensive, and people will sell it. Lots of people wants to sell, but there aren't many buyers around, thus the price drops.
And it is all in a days work with price action.