Hi,
I am new to Forex trading. I am just wondering how you would trade a chart that has risen in value way above the previous support and resistance.
If the price is still within a previous support or resistance , then we can use that for trading. But if the price has risen way above any previous support and resistance, then how do we know where the price will retract or rise towards to ?
You don’t. Although keep a watch on it.
For example, when trading the USD/CAD pair the (governments agreed) resistance level is 1.40, which is a long way above current rates, but it has been exceeded. If it ever occurs again, get ready for a sell signal. Similarly, the EUR/USD pair has a 50% quirk - in an uptrend price reaches 50% from the last S/R low, time to sell, and vice versa.
Some pro traders use VWAP to test and confirm movement when the S/R levels are breached.
In this situation, a proper analysis should be made of what is causing it. And if it is due to some strong news - you just have to wait.
I don’t trade those mainly because I wouldn’t know where they’re headed (I never do lol but the chances are much higher that I’m wrong in those cases). If this happens and it’s not a clear breakout to the down/upside, then I just skip and wait or look for a different pair to trade. 
I’m a noob though but that is what I do!
What this guy said lol.
If above or below wait for a retrace back to a known zone, and if a strong price action symbol is given for a reversal then you can open a position with good confidence. But I don’t just jump into a trade once above the last known zone, wait for the retrace and a good reversal signal.
This is a good thread to read up on price action. I backtested the strategy(Jan 2021-Mar. 2021, still front testing as well) and came up with a 83% win rate and good amount of pips, even with the thread being from 2012. lol.