Resistance
Resistance is a price area where selling pressure has previously been strong enough to stop a rise. When price returns there, sellers often reappear, so the advance stalls or reverses. Like support, resistance is a zone rather than a precise line, and repeated tests attract attention from traders on both sides until the level either holds firmly or gives way.
Full explanation
Resistance builds at prior swing highs, the upper edge of ranges, psychological round numbers and well-watched moving averages. A clean break with strong momentum and follow-through suggests genuine acceptance above the level; a sharp rejection wick suggests sellers remain in control. Broken resistance often turns into support on a pullback, which is one of the most reliable continuation setups.
Why traders watch it
Knowing where resistance sits stops you buying into a ceiling and helps you set realistic targets rather than hoping for an uninterrupted run.
Related indicators
Liquidity
Liquidity describes how easily you can buy or sell without moving the price. Deep liquidity means tight spreads, reliable fills and orderly movement. Thin liquidity means wider spreads, slippage and sudden jumps. Liquidity varies through the day, peaking when London and New York overlap and thinning during the late Asian session, holidays and the minutes around major releases.
Risk Sentiment
Risk sentiment describes the market's overall appetite for risk. In risk-on conditions investors buy growth-sensitive assets such as equities, the Australian dollar and emerging-market currencies. In risk-off conditions they retreat to perceived safety: the US dollar, the Japanese yen, the Swiss franc, gold and government bonds. Sentiment often drives currencies more than the day's scheduled data does.
Support
Support is a price area where buying interest has previously been strong enough to stop a fall. As price returns to that area, buyers often step in again, so the market pauses, bounces, or at least slows. Support is a zone rather than an exact line, and the more times it has held, the more traders watch it — until it eventually breaks.
Volatility
Volatility describes how much price moves over a given period. High volatility means larger, faster swings and wider ranges; low volatility means quiet, compressed trading. Volatility is not direction — a market can be highly volatile while going nowhere. It rises around major news, session opens and central-bank decisions, and it decides how far stops and targets need to sit.