Support for Resistance: Technical Analysis and Intraday Exchange Rates - Carol Osler

• Definition
• Support is a prediction of where demand exists that can temporarily halt a decline and Resistance is a prediction of where excess supply exists that can temporarily halt an advance
• How to find
• Support is usually defined by a previous reaction low and resistance is usually defined by a previous peak.
• A major market move will be reverse by about 50% in the 1st correction
• Fibonacci series predict re-tracements of 38.2% and 61.8%
• On newsletters support / resistance levels
• Over 70% of support / resistance ended in 0, and 96% ended in 0 or 5
• On times to use support
• When volatility is lower (lowest 50% of samples taken), support / resistance has a greater ability to forecast bounces.  When volatility is higher (highest 50% of samples taken) there was no statistical significance at the 5% level.