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Glossary · Chart and price

Retest

A return of price to a level it has just broken, used to check whether old resistance now acts as support, or the other way round.

By Sky Trade editorial teamUpdated

After a breakout, price often comes back to touch the level it broke. That return is a retest. In an upside breakout the old resistance is expected to act as new support; if it holds, the breakout gains credibility, and if price falls back through it, the breakout was probably false.

Many traders prefer entering on the retest rather than on the breakout candle itself. The entry sits close to a clear reference level, and you have seen at least one sign that the level has changed roles.

The catch:

  • Not every breakout retests. Strong moves can leave without looking back, and waiting means missing them.
  • A retest can overshoot by a few pips before holding, so treat the level as a zone.
  • Sometimes the “retest” is the start of a full reversal, and you only know afterwards.

For short-expiry trades a retest offers a natural moment to time an entry, but the expiry still has to be long enough for the follow-through to happen. On Sky Trade you can mark the level with the horizontal-line tool and watch for the return. See breakouts and false breakouts and support.

Example

EUR/USD breaks 1.0900 and reaches 1.0925, then drops back to 1.0903 and bounces. That bounce off the old resistance is a retest; a close below 1.0890 would have cancelled it.

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