Forex daily Support and Resistance levels

Last updated: November 20, 2024, 11:37 pm

Support and Resistance levels are widely used for daily market analysis. In fact, they play one of the key roles in setting entries, profit targets and exits.

Support and resistance levels are identified based on the price patterns and price turning points that took place in the past. Support levels try to stop falling price as it attempts to drop even further. Resistance levels resist to the rising price that attempts to go even higher.

Support or resistance levels that were tested by the price and sustained the pressure by not allowing market to surpass them, are considered as strong levels. If Support level is broken it becomes future resistance level. If resistance level is broken it plays a role of support for future market moves.

One of the well known trading tactics is to look at market reaction once price gets close to a Support or Resistance line. Traders often look for such patterns as double (triple) tops and bottoms, collinearity with pivot points, with Fibonacci retracement and projection levels or with trend lines.

Many traders also use various Forex indicators to measure and analyse price actions near support/resistance levels and look for trading opportunities upon identifying new trends.