Determining support and resistance is a key part of technical analysis in forex trading. Support is a price level where buying pressure is expected to be strong enough to prevent a further decrease in price, while resistance is a price level where selling pressure is expected to be strong enough to prevent a further increase in price. Traders can identify these levels by analyzing price charts and looking for areas where price has previously reversed or consolidated. They can also use tools like trendlines, moving averages, and Fibonacci retracements to help identify these levels. Understanding support and resistance can help traders make more informed trading decisions and manage their risk more effectively.
