Forex Charting Tutorials

Price has broken the green 22 simple moving average. Next downside target is the red horizontal trendline and previous swing high (December 2004) at the 1.3665 area. I expect a retrace up to the previous breakout point. All breakouts will retrace and retest that support level that it just broke. This is a pattern that I picked up on after years of watching price action in relation to previous support/resistance levels.

Notice the cluster of red horizontal trendlines sitting above the current price level on the chart. That was solid support from muliple swing high/low’s where price had encountered buying interest, which has now turned to selling interest. Support has turned into resistance. Smart money will sell into any rallies (retrace) upward that touches this cluster resistance.

P.S. Click on the chart 2 times for a zoom in, to see the red trendlines….