The pivot point is generally used by traders in banks and large institutions. As these groups of people that form a large volume of transactions, usually cause the price movement.
The pivot points are considered, higher levels of support and resistance where it is likely to see the revulsion in prices.
One of the strategies is to seek a period of congestion, rather than a period trend. This can be found at the extreme levels of R2, R3 or S2, S3.
In the chart of the Pound Sterling against the U.S. dollar we note that the line of the weekly Pivot Point is located above the current quote, if the market continues upward with the same force that began the week, we can buy position, just above the close of the pivot point.
_____WEEKLY____
Weekly - R3 = 1.5899
Weekly - R2 = 1.5784
Weekly - R1 = 1.5605
Weekly Pivot = 1.5490
Weekly - S1 = 1.5311
Weekly - S2 = 1.5196
Weekly - S3 = 1.5017
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_____MONTHLY____
Monthly - R3 = 1.6163
Monthly - R2 = 1.5968
Monthly - R1 = 1.5751
Monthly Pivot = 1.555
Monthly - S1 = 1.5374
Monthly - S2 = 1.5046
Monthly - S3 = 1.4668
