Using Moving Averages as Dynamic Support and Resistance
Another powerful way to use moving averages is by treating them as dynamic support and resistance levels.
We call them “dynamic” because, unlike traditional horizontal support and resistance lines that stay in one place, moving averages adjust based on recent price movements. They shift with the market, constantly updating as new price data comes in.
Many forex traders use these moving averages as areas of interest. For example:
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They buy when the price dips toward a moving average (acting as support).
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They sell when the price rises and touches a moving average (acting as resistance).
Example: GBP/USD on the 15-Minute Chart with the 50 EMA
Let’s apply the 50-period EMA to a 15-minute chart of GBP/USD.
You’ll notice that each time the price approached and tested the 50 EMA, it bounced back down. In this case, the moving average acted as a strong resistance level—clearly a key dynamic barrier to price movement.
Important Note on Dynamic Levels
Just like traditional support and resistance, price doesn’t always bounce perfectly from the moving average. Sometimes it may:
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Slightly overshoot the line before reversing.
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Break through completely, signaling a potential shift in trend.
To account for this, some traders use two moving averages instead of one. They wait for price to enter the area between the two averages before making a trade decision.
This area is often referred to as “the zone.”
Example: GBP/USD with 10 EMA and 20 EMA
When plotting both the 10 and 20 EMAs on the same 15-minute GBP/USD chart, you may notice that price often hovers or wicks into this space before making its next move.
In this case, the area between the EMAs can act as a flexible zone of support or resistance—giving traders more room for price fluctuation without immediately invalidating their trade idea.
Breakouts Through Dynamic Support and Resistance
Now that you know moving averages can serve as dynamic support and resistance, it's important to remember: they can be broken, just like any other level.
Let’s go back to the 50 EMA on the GBP/USD 15-minute chart.
Initially, it acted as strong resistance, with price repeatedly bouncing off it. But eventually, price broke above the 50 EMA and surged upward. When price later retraced, the 50 EMA—previously resistance—now acted as support.
This role reversal is common and highlights how moving averages can flip from resistance to support (and vice versa), depending on market momentum.
Final Thoughts
Moving averages provide a convenient, constantly updating way to identify potential support and resistance areas on your chart. Instead of manually drawing horizontal lines, you can leave moving averages on your chart to monitor zones of interest in real time.
However, the challenge lies in choosing which moving average(s) to use. Different settings will suit different market conditions and trading styles.
Experiment, backtest, and see what works best for your strategy.