Support is a price level where buying pressure tends to prevent further decline, and resistance is a level where selling pressure tends to prevent further advance. These levels are identified from historical price action and are core concepts in technical analysis. When support is broken, it often becomes resistance, and vice versa.
Gold (XAU/USD) has bounced off the $2,300 level three times in the past month, making it a strong support level. Traders watch for a fourth bounce to buy, or a breakdown below $2,300 as a signal to sell.
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