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In technical analysis, identifying key support and resistance levels is essential for understanding price movements in financial markets. Support refers to a price level where a downtrend may pause due to increased buying interest. It's the point at which traders expect demand to be strong enough to prevent further decline. When the price approaches a support level, it often rebounds, giving traders an opportunity to enter long positions.

On the other hand, resistance is the price level where an uptrend may halt as selling pressure increases. Traders see this as a ceiling, where prices are likely to reverse or consolidate. The key here is the psychology behind these levels—when prices near resistance, sellers often become more aggressive, pushing the price down.

Both support and resistance are dynamic and can shift with market conditions. For instance, once a resistance level is broken, it often becomes the new support. Traders commonly use these levels to place stop-loss orders or set profit targets. Recognizing these areas allows traders to make more informed decisions, enhancing the potential for profitable trades while minimizing risk.

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