Breaking through Dynamic Support and Resistance

Breaking through Dynamic Support and Resistance

From the previous article, it has now become clear that moving earnings could possibly behave as support and resistance.  By mixing a few of them creates what we call the zone. But it’s also wise to know that they’ll break, as with every support and level of resistance!

Let us visit again the 50 EMA on GBP/USD’s 15-min chart.

Dynamic Support and Resistance

Within the chart above, we have seen the 50 EMA held like a strong level of resistance for some time as GBP/USD frequently returned off it.

However, as we have outlined with the box, cost finally broke through and increased. Cost then retraced and examined the 50 EMA again, which demonstrated to become a strong support level.

So this means that moving averages may also behave as dynamic support and resistance levels.

One thing to remember about  using moving averages is the fact that they are always changing, meaning you can easily let it rest in your chart and do not have to keep searching in time for you to place potential support and resistance levels.

 

You will know that the line probably represents a moving market. The only issue obviously is determining which moving average to make use of!

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