Economic Policy Review
Support for Resistance: Technical Analysis and Intraday Exchange Rates
July 2000 Volume 6, Number 2
JEL classification: F31, G12, G14

Author: Carol Osler

“Support” and “resistance” levels—points at which an exchange rate trend may be interrupted and reversed—are widely used for short-term exchange rate forecasting. Nevertheless, the levels’ ability to predict intraday trend interruptions has never been rigorously evaluated. This article undertakes such an analysis, using support and resistance levels provided to customers by six firms active in the foreign exchange market. The author offers strong evidence that the levels help to predict intraday trend interruptions. However, the levels' predictive power is found to vary across the exchange rates and firms examined.

PDF full articlePDF16 pages / 128 kb
Press release
Related New York Fed Content
By continuing to use our site, you agree to our Terms of Use and Privacy Statement. You can learn more about how we use cookies by reviewing our Privacy Statement.   Close