June 22, 2000
NOTE TO EDITORS
Support for Resistance: Technical Analysis and Intraday Exchange Rates--an article in the latest issue of the New York Feds Economic Policy Review--is enclosed.
New York Fed senior economist Carol Osler concludes that "support" and "resistance" levels, technical trading signals intended to indicate where exchange rate trends are likely to stop, are effective.
Osler explains that although support and resistance levels are widely used for short-term exchange rate forecasting, their ability to predict intraday trend interruptions has not been rigorously tested. Accordingly, she tests levels provided to customers of six firms active in the foreign exchange market during the 1996-98 period.
Osler finds that:
Contact: Douglas Tillett