$OAX /USDT

In trading, support and resistance are critical concepts used to predict potential price movements in financial markets. Support refers to a price level where an asset tends to stop falling, as demand begins to outweigh supply. This level acts as a "floor," preventing further decline in price. Traders often look for support levels to identify buying opportunities, as the asset is likely to rebound from this point.

On the other hand, resistance represents a price level where selling pressure overcomes buying pressure, causing the asset's upward movement to pause or reverse. This acts as a "ceiling" that the price struggles to break through. Traders typically watch for resistance levels to identify potential selling or shorting opportunities.

Identifying support and resistance zones helps traders make more informed decisions, manage risk, and improve timing for entry or exit points. These levels can be spotted through technical analysis tools, such as trendlines, moving averages, or chart patterns. However, it's important to remember that while support and resistance are strong indicators, they can break down under certain market conditions, leading to trend reversals or breakouts, which may offer new trading opportunities.

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