Support, Resistance & Trends

Support and Resistance in Forex

These concepts work the same across all markets but are especially important in forex due to the trending nature of currency pairs.

Identifying Key Levels

• Previous highs and lows
• Round numbers (1.1000, 1.2000, etc.)
• Daily/weekly open and close
• Session highs and lows
• Pivot points

Round Number Psychology

In forex, round numbers like 1.0000, 1.1000, 1.2000 often act as support/resistance because traders place orders at these levels.

Trend Analysis

Forex pairs often trend for extended periods due to economic policy differences between countries.

Uptrend Characteristics

• Higher highs and higher lows
• Price above key moving averages
• Pullbacks find support quickly

Downtrend Characteristics

• Lower highs and lower lows
• Price below key moving averages
• Rallies meet resistance quickly

Fibonacci in Forex

Fibonacci retracements are widely used in forex. Key levels: 38.2%, 50%, 61.8%. Price often retraces to these levels before continuing the trend.