Weekly and monthly support and resistance levels are critical tools for traders who want to understand the major turning points in the market. These higher timeframe levels represent areas where price has historically struggled to move beyond, providing powerful zones for trade entries, exits, and risk management.

In this article, we explain how weekly and monthly support and resistance levels work and how to apply them successfully across different markets.

What are Weekly and Monthly Support and Resistance Levels?

• Support Level: A price area where buying interest has historically been strong enough to prevent the market from falling lower.
• Resistance Level: A price area where selling pressure has historically been strong enough to prevent the market from moving higher.

When drawn on weekly and monthly charts:

• They represent major institutional levels.
• They act as key decision points for traders and investors.
• They are more powerful and reliable than intraday support and resistance.

Why Weekly and Monthly Support and Resistance Levels Matter

• Higher Reliability: Longer timeframe levels tend to hold more weight than lower timeframe ones.
• Key Reversal Zones: Major market reversals often start around these levels.
• Improved Trade Timing: Entries aligned with strong support or resistance increase winning probabilities.

How to Identify Weekly and Monthly Support and Resistance

Here’s how to prepare:

1. Open a weekly or monthly chart for your chosen instrument (e.g., EUR/USD, gold, S&P 500).
2. Identify major swing highs and swing lows.
3. Draw horizontal lines at:
   • Peaks where price reversed downward (resistance).
   • Valleys where price reversed upward (support).

Focus on levels that have been touched multiple times or caused significant price reactions.

Pro Tip: Clean, obvious levels are more effective than messy, choppy zones.

How to Trade Using Weekly and Monthly Support and Resistance

Here’s a structured approach:

1. Trend Context

• In an Uptrend:
  • Weekly/monthly support levels are likely to hold.
  • Look for buying opportunities on pullbacks.
• In a Downtrend:
  • Weekly/monthly resistance levels are likely to hold.
  • Look for selling opportunities on rallies.

Use moving averages or trendlines to confirm the overall trend.

2. Entry Strategy

• Buy Setup (Near Weekly/Monthly Support):
  • Wait for bullish reversal candlestick patterns (e.g., hammer, bullish engulfing) at support.
  • Enter long on confirmation.
• Sell Setup (Near Weekly/Monthly Resistance):
  • Wait for bearish reversal candlestick patterns (e.g., shooting star, bearish engulfing) at resistance.
  • Enter short on confirmation.

Combining price action signals with the weekly or monthly level increases the setup’s reliability.

3. Stop-loss Placement

• For long trades, place the stop-loss just below the weekly or monthly support level.
• For short trades, place the stop-loss just above the weekly or monthly resistance level.

Give trades some room to breathe because higher timeframe levels can experience small intraday penetrations.

4. Profit Target

• Target the next significant support or resistance level on the chart.
• Alternatively, use trailing stops to capture larger moves if the trade runs favourably.

Weekly and monthly levels often lead to large price moves, allowing excellent risk-to-reward ratios.

5. Risk Management

• Risk only 0.5% to 1% of your trading account per trade.
• Position size appropriately — higher timeframe trades can require wider stop-losses.

Best Practices for Weekly and Monthly Support and Resistance Trading

• Use Confluence: If weekly/monthly levels align with Fibonacci levels, moving averages, or trendlines, the zone becomes even stronger.
• Patience is Key: Wait for clean confirmations rather than rushing in.
• Monitor Breakouts: When a weekly or monthly level breaks with strong volume, it can lead to a major new trend.

When Weekly/Monthly Levels May Fail

• During extreme market events (e.g., financial crises, unexpected geopolitical events) where fundamentals override technical levels.
• After major policy shifts by central banks or governments.

Adapt quickly if these macro factors shift market behaviour.

Common Mistakes to Avoid

• Forcing Trades: Not every touch of a level results in a reversal — wait for confirmation.
• Ignoring Market Sentiment: Always consider the broader macro backdrop.
• Setting Stops Too Tight: Weekly and monthly levels require wider stops compared to intraday trading.

Advantages of Weekly and Monthly Support and Resistance

• High Reliability: Longer timeframe levels attract significant institutional interest.
• Improved Risk-to-Reward: Trades near major levels offer excellent reward potential.
• Strategic Clarity: Helps in aligning lower timeframe trades with higher timeframe market structure.

Conclusion

Weekly and monthly support and resistance levels provide traders with critical insights into where the market is likely to reverse or accelerate. By combining these powerful zones with price action confirmation and disciplined risk management, traders can align their strategies with the most important market levels and significantly improve their consistency.

To master professional techniques like trading with weekly and monthly support and resistance and build a complete trading plan, explore our expert Trading Courses designed to help you trade smarter, faster, and more successfully.