Retest
When price returns to a level it has just broken, to see whether that level now holds from the other side.
Full explanation
A retest happens after a level breaks. Price moves away, then comes back to the broken level and tests it from the new side. Old resistance is checked as support, and old support is checked as resistance.
The retest is the market's own verification. If the level holds and price turns away from it, the break was accepted. If price slices back through and carries on, the break has failed and the original range is back in charge.
Not every break gets a retest — strong moves sometimes never return. That is why waiting for one is a choice with a cost: better information, fewer trades.
Why traders watch it
Entering on the retest instead of the break usually means a tighter stop and better evidence, at the price of occasionally missing the move entirely.
Trading considerations
- Judge the retest on closes, not on a single touch of the level.
- A shallow, quick retest is stronger than a slow, grinding one.
- If price closes back inside the old range, treat the break as failed.
- Accept that some moves never retest — that is the cost of waiting.
Educational guidance only — never a trading signal or recommendation.
Old resistance becomes support
EUR/USD breaks above the Asian range high and runs 15 pips. An hour later it drifts back to that same high, touches it, and turns up again without closing below it. That retest turned a broken level into support and gave a second entry with a much smaller stop than the original break.
Related indicators
Breakout
A breakout occurs when price moves decisively beyond a defined level such as a range high, trendline or consolidation boundary. It signals that the balance between buyers and sellers has shifted and can start a sustained move. Breakouts also fail often, so traders look for confirmation through follow-through, expanding range and a successful retest of the broken level.
False breakout
A move beyond a level that fails and returns inside, trapping traders who acted on the initial break.
Confirmation
Observable evidence, defined in advance, that a setup is doing what you expected before you commit.