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Support and Resistance in Forex

What Are Support and Resistance?

Support is a price level where buying prevents further decline — the floor. Resistance is where selling prevents further advance — the ceiling. These are self-fulfilling: millions of traders watch the same levels, creating real order flow.

How to Find Key Levels

Methods: (1) Previous swing highs/lows — most reliable. (2) Round numbers — $2,000, $2,500 on gold; 1.2000 on EUR/USD. (3) 50% and 61.8% Fibonacci retracement. (4) Weekly/monthly open prices. (5) Psychological levels.

Trading Gold S/R

Gold respects round number levels strongly. $2,000, $2,500, $3,000 have all been major battlegrounds. Breakout above resistance on high volume = momentum continuation. Rejection at resistance with bearish candlestick = short setup.

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Frequently Asked Questions

How do I know if a support level is strong?
Strong support has multiple touches (3+), high volume at those touches, confluence with Fibonacci levels or round numbers, and rejection candles (hammers, doji) at those prices.
Do support and resistance levels work on all timeframes?
Yes, but higher timeframe levels (daily, weekly) are stronger. Major weekly resistance on gold is far more significant than 15-minute resistance.

Related Guides

Candlestick Patterns → RSI Indicator → Fibonacci Retracement →