Aggressive shorts can use the aforementioned .1077, but I prefer to set my sell limits at .1093 and .1340 for now.
Trading with Support and Resistance
From a strategic point of view, support and resistance levels represent smart places to anticipate a reaction in the price of an asset, and therefore represent a basic tool in technical analysis.
Numerous traders use them, but the diversity in application and integration of support and resistance analysis tell us that charting is definitely not an exact science and more of an art.
One of the most common mistakes that new traders make is buying too close to a line of resistance or selling too close to a line of support. In this page we provide enough set-ups and real time examples, to make sure you thoroughly understand this simple yet important dynamic.
Identifying Supply and Demand
There where the difference between the number of buyers and sellers get more remarkable, it tends to form a Support or Resistance level. Your next logical quest will be to identify them on a price chart.
Historical and potential Support and Resistance levels, can lead to several constructs: horizontal lines and dynamic trendlines are the most used ones and can be based on significant highs and lows. Lines are also used to delineate price channels as well as classical chart figures such as triangles and wedges.
Some technical indicators can act as potential Support and Resistance levels, such as moving averages, Pivot Points and Fibonacci extensions and retracements which are commonly used in Elliott Wave analysis.
Round numbers - those quotes ending in 00 or 50- and emotional spikes are often perceived as Support and Resistance levels.
When these levels encompass a larger area on the charts technicians speak of a Support and Resistance Zone.
usd/jpy supply and demand
EUR/USD Support and Resistance
the pair is trading closer to an important horizontal support near 1.0960-50 area. Hence, a sustained break below this important support, leading to a subsequent drop below 1.0935 support marking 61.8% Fibonacci retracement level of 1.0522-1.1616 up-move, would turn the pair vulnerable to break below 1.0900 round figure mark and head towards March lows
USD/JPY Support and Resistance