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[Oluti]

There are several types of horizontal inflection points that can be employed in forex technical analysis. Among these, the most common ones are the psychological round numbers, which tend to hold well as support or resistance for major currency pairs and yen pairs.

Major psychological levels refer to price levels ending in 00, such as 1.3400 for EUR/USD or 95.00 for USD/JPY. Generally speaking, the more zeroes at the end of the price level tends to result in a stronger inflection point. For instance, 100.00 holds as a strong support or resistance level for USD/JPY while parity or 1.0000 tends to elicit a bounce from AUD/USD or USD/CAD.


Minor psychological levels are those that end in 50, such as 1.6550 for GBP/USD or 171.50 for GBP/JPY. These tend to hold as intraday support or resistance, particularly when they line up with other kinds of inflection points and create what traders typically call a confluence.


Other kinds of intraday inflection points include the previous day high, low, open and close. The previous day high is usually treated as a resistance level for potential rallies, with an upside break acting as a signal that further gains are in the cards. The previous day low is usually considered a support level for potential price declines, with a downside break acting as a signal that further losses might take place.

Average true ranges are also used in determining intraday inflection points, particularly among day traders or scalpers. The top and bottom daily average true range or ATR is calculated based on the average price movement per day for a specified number of days to be set by the trader. These usually act as support and resistance for the day, where price is expected to turn. A break above or below these levels could be indicative of stronger rallies or selloffs.


As mentioned in the previous section, technical indicators such as moving averages can also be treated as support and resistance. In particular, the 200 SMA or simple moving average on the daily time frame is usually considered support or resistance, depending on how the trend is going. During an uptrend, price is expected to bounce off the 200 SMA while a market downtrend could see the price bounce below the 200 SMA.


Bollinger bands can also serve as dynamic inflection points, with the upper band serving as resistance and the lower band acting as support. Just as with other types of inflection points, a break above the resistance could be a signal for more gains while a break below the support could indicate further losses.

Trend lines, uptrend and downtrend channels, as well as pivot points can also serve as support and resistance. These inflection points are determined mostly based on past price action, with trend lines and channels created by connecting the recent highs and/or lows of price action and pivot points calculated using formulas incorporating the open, high, low, and close for the previous period. Details for these kinds of inflection points are covered in the next sections.

 

[lioralace]

Alright, so let’s just get this out of the way—horizontal inflection points in forex? Totally underrated, if you ask me. Most newbies are out here chasing fancy indicators and wild chart patterns, but the real OGs know it’s all about those sneaky price levels where the market just can’t make up its mind. Stalls, fakeouts, crazy momentum surges—if you know where to look, these spots practically hand you the cheat code for when to jump in or nope out of a trade.

Now, let’s talk psychological round numbers. You know the ones—those big, fat numbers like 1.3400 on EUR/USD or 95.00 on USD/JPY. Why are they a big deal? Well, because everyone—from your friend who just started trading yesterday to some suit in a London bank—gravitates to them. It’s like a moth and a porch light. Traders line up orders at these levels and the price just can’t ignore them. Want to see fireworks? Watch what happens when something big smashes into 100.00 or that magical 1.0000 “parity” zone.

And hey, don’t sleep on the .50 levels either. They’re not as spicy as the “00s,” sure, but slap them on a lower timeframe with some other indicators and suddenly, you’ve got turbocharged confluence. Translation: a whole bunch of clues pointing in the same direction, and that usually means higher odds of actually being right. You don’t wanna bet against confluence. Trust me.

If you’re the impatient type (like, guilty as charged), those previous day highs and lows are pure money for intraday plays. Break above yesterday’s high? People start screaming “bullish!” and, more often than not, the market runs with it. Crack below yesterday’s low? Hello, bear parade. These levels are like road markers—you know, “turn left here for profits,” if only it were that easy.

Oh, and volatility freaks, listen up: Average True Range (ATR) isn’t just some nerdy number. It basically predicts how wild the market’s gonna get today. If price busts out past the ATR band? Something big is cooking, and you should probably pay attention before you get steamrolled.

Can’t forget moving averages. Especially the 200 SMA. That level is like the bouncer at the club—it decides whether bulls or bears get to party. If price is chilling above? Bulls rule. Drop below? Suddenly everyone’s running for the exits. Super simple, but it works, and I’m not gonna argue with decades of trader superstition.

And for all you visual learners, Bollinger Bands slap a nice little boundary right on your chart. Upper band is usually resistance, lower band means support. If price flies outside the band, watch out—either you’re catching a monster trend, or it’s about to zip right back. Sometimes, the market just likes to punk you.

Long story short, if you get good at spotting these horizontal inflection points, you’re not just guessing anymore. You’re actually playing chess while everyone else is playing checkers. Trading without these levels? May as well be flipping a coin.