Support and Resistance – Analytics & Forecasts – 19 September 2022

Support occurs when prices stop falling, change direction, and start moving higher. Support is often seen as a “floor” that supports or maintains prices.

Resistance is a price level where the price rise stops, changes direction and starts to fall. Resistance is often seen as a “ceiling” that prevents prices from rising further.

If price breaks support or resistance, price often continues to the next support or resistance level. Support and resistance levels are not always accurate; they are usually an area that covers a small range of prices, so the levels can be broken, or pierced, without necessarily breaking. As a result, support/resistance levels help identify potential points where price may change direction.

Greater versus lesser resistance/support

Minor resistance or support temporarily delays the rise or fall of prices within a larger market trend, while major resistance or support stops prices from rising or falling and the larger market trend changes from address Lower price resistance/support is an artificial horizontal line that represents one area, which once served as price support or resistance, and has now transformed into the other. For example, if the price used to be a support level, it is now a resistance level.

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