# How to Read Support and Resistance Levels

> A New York Fed study found that exchange rate moves can accelerate unusually once rates reach levels where stop-loss orders are documented to cluster [1].

Last updated: 2026-10-22 · https://www.nx24.ai/en/rehber/destek-direnc-nasil-okunur

## What is support?

Support is a price level where buyers step in and stop a decline. Levels that reacted several times before attract attention when retested.

## What is resistance?

Resistance is a level where sellers cap a rally. A broken resistance often becomes support, and a broken support often becomes resistance.

## How levels are found

Previous highs and lows, high-volume zones, moving averages and Fibonacci retracements are candidates. ATR widens levels according to volatility.

## Confirming a breakout

A close beyond the level, rising volume and a successful retest count as confirmation. Unconfirmed breakouts are often false.

## Order clustering at levels

A New York Fed study found that exchange rate moves can accelerate unusually once rates reach levels where stop-loss orders are documented to cluster [1]. Sharp, short moves just beyond obvious levels are therefore possible; see the stop-clustering guide.

## Risk management

Define a stop-loss and a risk/reward ratio before every entry. This page is educational, not investment advice.

## Frequently asked questions

**Why do sharp, short moves appear just beyond obvious levels?**

A New York Fed study found that exchange rate moves can accelerate unusually once rates reach levels where stop-loss orders are documented to cluster, so sharp, short moves just beyond obvious levels are possible [1].

## Sources

1. C. L. Osler. [Stop-Loss Orders and Price Cascades in Currency Markets](https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr150.pdf). Federal Reserve Bank of New York, Staff Report No. 150, 2002. Accessed: 2026-10-22.

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Not investment advice. NX24 — https://www.nx24.ai/