Resistance

Resistance is a price level or zone where selling pressure has historically been strong enough to prevent price from moving higher. It acts like a ceiling — price approaches, gets pushed back, approaches again. The more times a level has held, the more significant it's considered.

Resistance levels form for various reasons: they might be previous highs, round numbers (like 1.1000 on EUR/USD), Fibonacci levels, or areas where a high volume of sell orders is clustered. Institutional traders and algorithms often place orders at these levels, creating genuine barriers to upward movement.

When resistance is eventually broken (a "breakout"), it often flips roles and becomes support. This is one of the most fundamental concepts in technical analysis and creates trading opportunities: you can buy on a confirmed breakout above resistance, or buy a pullback to the former resistance level that's now acting as support.