Support & Resistance

Support and resistance refer to levels at which a price in the market has historically had a difficult time breaking through.

Support – This refers to a level at which the price has historically had difficulty falling below. This is because at this level, there is a concentration of buyers who are willing to buy the currency at that specific price, which creates an influx of demand that prevents the price from going lower.

Resistance – This refers to a level at which the price of a currency pair has historically had difficulty rising above. This is because at this level, there is a concentration of sellers who are willing to sell the currency at that specific price, which creates an influx of supply that prevents the price from going higher.

Note

We use support and resistance levels as key levels (Potential reaction zones)

They assist us with our SL positioning (Act as a force in our favour)