Technical analysis consists primarily of a variety of technical studies, each of which can be interpreted to generate buy and sell signals or to predict market direction. Please see our Technical Studies page for a detailed description of these studies and their uses. One use of technical analysis, apart from technical studies, is in deriving “support” and “resistance” levels. The concept here is that the market will tend to trade above its support levels and trade below its resistance levels. USD has established a resistance level at approximately . In other words, EURUSD has risen up to .
For example, in chart below EURUSD has established a resistance level at approximately . The trading strategy would then be to sell EURUSD the next time it gets close to . 9015, with a stop placed just above . This would have indeed been a good trade as EURUSD proceeded to fall sharply, without breaking the .