Post of the Day:Trends and Ranges
I have heard that currency pairs are either ranging or trending. How does that look on a chart? Thanks.
Power Course Instructor’s Response:
After a currency pair has a trending move, it will generally “bounce around” testing a support level after a down trend or testing a resistance level after an uptrend. If the level in question holds, the price action can then begin a trending move in the opposite direction.
Take a look at the chart below…
Initially we see the downtrend and we notice that it come to a halt at around the 1.1875 support level on this chart. It trades in range of about a 100 pips, tests support again and then begins a bullish trend to the upside.