Lesson 11: Support and Resistance in Forex Support and resistance are two of the most popular concepts of technical analysis. These levels are prices at which there is a barrier where the price would either stop or reverse at the given level. Support is a level that prevents prices from being pushed downwards. Resistance is the level that prevents prices from being pushed upwards. There are three golden rules for support and resistance. The longer the price stays at the support or resistance level, the stronger it gets. This happens because the more obvious the level becomes, the more traders will be placing their buy or sell orders there. When support or a resistance-level breaks, the stronger it has been, and the stronger the next move will be. In theory, every support should become resistance and every resistance should become support.
Here you can see the price was rising and met resistance. When it broke through it was this same level from the upside and it became the new support. The same can be seen in down-trend; the price was falling and it met support. It managed to break through and tested this level as the new resistance.