EUR/USD Technical Analysis: Resistance Now Above 1.10

Like any other market, forex makes some really nice swings in price, which when identified can give you an opportunity for an excellent trade, notes Pete Southern of LiveWire Market Blog.

Swing trading is the art of catching a changing trend and riding it out in the other direction or “swinging” for use of a better phrase! The key to being successful with swing trading is to have a solid method for picking direction changes. There are various ways to do this but for this article I will cover my own favorite. It comprises of a few steps, but by following each one you can be more certain the patterns you are looking at will work out.

Identify Support or Resistance
First and most importantly, you cannot swing trade forex properly unless you can identify clear areas where the price may react from. This is how the big boys play the game, and if done correctly, it can show you excellent areas to watch for entries.

Draw some horizontal lines on your charts. Connect some previous highs and lows. Look for areas where the price has reversed a couple of times in the past, highlight them with a horizontal line and leave them on your chart. These will form the blueprint for your swing trading.


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Obviously as time progresses and the more often these lines have been tested in the past, the stronger and more important they become. What you should be looking for is an area that has been tested at least twice, and if it’s within a larger range (like the middle line above) then tests from both directions for support and resistance is essential. These are the areas at which you will be looking to trade from.

Now there are some traders who will just go shorting into resistance or longing into support. In my opinion this is a hit and hope strategy. You will be undone time and time again doing this, and even with good money management, the strain on your emotions will eventually take your edge.

Once the price is heading into one of these areas, it is time to drill down onto a shorter timeframe chart and start watching the patterns.