MTI Analyst Articles

Support & Resistance

 

January 26, 2010

FX Monte

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Chart Analysis

On the Eur/Jpy Weekly we can see that we have had a large support level since December 2008. This is obviously a strong support level because the market has tested it 6 times and has been unable to break below it.

Currently the market is below this support level but it will be interesting to see if the market can stay there. Very often the market will dip below a support level and then rally back up to get above it. A good example of this would be to take a basketball and hold it under water in a pool. What would happen to the ball when you let it go? The ball will climb quickly up and actually rise out of the water. Same is true in the market if the support is strong.

Analysis

When you see large support on a large time frame you will be able to utilize that in your trading. When you see the market bounce off of that support level on a smaller timeframe then you will be able to go long and capture pips.

Always wait for confirmation at the support level though, don’t assume that the market will bounce at the support level. If you automatically get in at these levels then you will suffer more losses than you have to.

Market Forecast

	EUR/UD	GBP/USD	USD/JPY	USD/CHF	USD/CAD	AUD/USD	NZS/USD
Resistance 3	1.4578	1.6515	92.66	1.0507	1.0745	.9320	.7443
Resistance 2	1.4555	1.6476	92.42	1.0503	1.0697	.9278	.7408
Resistance 1	1.4413	1.6457	92.03	1.0497	1.0576	.9253	.7398
Current Price	1.4150	1.6289	91.37	1.0442	1.0484	.9137	.7221
Support 1	1.4084	1.6210	90.78	1.0229	1.0244	.9122	.7193
Support 2	1.4068	1.6062	90.30	1.0168	1.0239	.9097	.7143
Support 3	1.4045	1.5915	90.23	1.0137	1.0223	.9091	.7069