Confusion on support vs consolidation

Here is a weekly chart:

Consolidations contribute to define future Support or Resistance.
In this case the highest value on that red candle, could be considered a support level which has already been crossed by the current descending movement.

Happy trading!:slight_smile:

What do you think it is and why?
Are your terms “support level” and “consolidating level” synonymous?

If it is a “support level”, what does that mean to you?
If it is a “consolidating level”, what does that mean to you?

I am not sure …but it feels to me support is a floor …consolidating level(may not be called as support …is it ?) is a little pause in the move.

anyway , do you call the level I marked as a support area ?

seniors …please comment.

which highest red candle you are talking about ? can you please mark it ?

No that isn’t a support level:refer to your reading on S/R levels. At most its just a retracement.

That is not a consolidation.

If you had moved the arrow further down where the chart is flat then it is arguable that the pair consolidated between 250 and 350. Then you see the break above to 375, to 450 then 525.

Outside of that NO.

Consolidation is simply price establishing Support (defined by at least 2 or 3 clear pivot lows) and resistance (pivot highs) normally defined as a range.

Consolidation is usually a stretch of indecision or lack of activity around a certain level. It CAN indicate support and resistance areas but we can’t know for sure until we see how traders react to them. Here are quick definitions that might help:

Consolidation: Consolidation: The Free Forex Encyclopedia

Support and resistance: Support and Resistance | Support and Resistance Levels | Elementary

Perhaps its just me? But wouldn’t the area being highlighted by the OP be considered RESISTANCE? Yes with the benefit of hindsight we can all chime in and say it was merely consolidation or whatever. However as this is a weekly chart rejecting price over several consecutive weeks surely it would have been possible to trade it if not on the daily, certainly on the 4H.