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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