News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
Oil - US Crude
Wall Street
More View more
Real Time News
  • RBA Minutes: Rate rise conditions unlikely met until 2024 at earliest, changing 3-year yield target from 0.1% not warranted. Will continue bond buys if assists progress towards goals -BBG $AUDUSD #RBA
  • RT @BrendanFaganFx: Japanese Yen Analysis: USD/JPY Points Higher as GDP Data Misses Expectations $USDJPY Link:
  • Heads Up:🇦🇺 RBA Meeting Minutes due at 01:30 GMT (15min)
  • Japan's Economic Minister Yasutoshi says Q1 GDP drop due largely to dip in consumption - BBG
  • What are some monetary policies that could affect Gold this quarter? Get your Gold free forecast here: #DailyFXGuides
  • 🇯🇵 GDP Growth Rate QoQ Prel (Q1) Actual: -1.3% Expected: -1.2% Previous: 2.8%
  • 🇯🇵 GDP Growth Annualized Prel (Q1) Actual: -5.1% Expected: -4.6% Previous: 11.6%
  • Heads Up:🇯🇵 GDP Growth Rate QoQ Prel (Q1) due at 23:50 GMT (15min) Expected: -1.2% Previous: 2.8%
  • Heads Up:🇯🇵 GDP Growth Annualized Prel (Q1) due at 23:50 GMT (15min) Expected: -4.6% Previous: 11.7%
  • Technical analysis of charts aims to identify patterns and market trends by utilizing differing forms of technical chart types and other chart functions. Learn about the top three technical analysis tools here:
Old Support Becomes New Resistance

Old Support Becomes New Resistance

Richard Krivo, Trading Instructor

Student’s Question:I am still on not clear on how old support becomes new resistance…or vice versa. Help!Instructor’s Response:Good question…

Take a look at the chart of the EURUSD below…

Old_Support_Becomes_New_Resistance_body_chart_5_23_11.png, Old Support Becomes New Resistance

The gray line is a trendline showing support which has been in place since the middle of February. However, where price action breaks through that trendline (noted on the chart) and several candles close below that trendline, the line no longer represents support since price has convincingly broken through it.

Now, after the red candle closed below old support (noted on the chart), price action comes back up to test the former support line (blue spinning top candle) which now represents new resistance. Price action will test the new resistance line to see if it holds. The spinning top candle tests the new resistance line and does not penetrate it.

A way that a trader can use this concept would be by shorting the pair as new resistance is tested and respected by price action. In other words, a candle body does not close above the level that is now trendline resistance. When taking that trade, the stop would be placed just above trendline resistance or just above the highest wick that penetrated that resistance level.

The opposite would be true if we were in a downtrend and we had a resistance line above price action which kept being tested from below. It would represent resistance and when it was broken through by price action, it would then be new support.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.