Pivot point

Pivot points come from floor traders on futures exchanges, who needed quick reference levels for the day ahead. The classic (floor) method uses the previous day's high (H), low (L) and close (C):

• Pivot (P) = (H + L + C) ÷ 3
• R1 = 2P − L, S1 = 2P − H
• R2 = P + (H − L), S2 = P − (H − L)

Price above the pivot is often read as a firmer tone for the session, price below as a weaker one, and R1/R2 and S1/S2 are treated as possible resistance and support. Weekly and monthly pivots use the previous week or month instead. Alternative formulas exist, including Woodie, Camarilla and Fibonacci pivots.

Example

Illustrative figures: yesterday EUR/USD had a high of 1.0900, a low of 1.0800 and a close of 1.0870.

• P = (1.0900 + 1.0800 + 1.0870) ÷ 3 = 1.0857
• R1 = 2 × 1.0857 − 1.0800 = 1.0913
• S1 = 2 × 1.0857 − 1.0900 = 1.0813
• R2 = 1.0857 + 0.0100 = 1.0957
• S2 = 1.0857 − 0.0100 = 1.0757

The pivot point calculator produces these for any inputs and formula.

Practical notes

• Which close? Forex trades around the clock, so "yesterday's close" depends on the platform's server time. Pivots from a broker using New York close can differ from one using another time zone.
• Self-fulfilling, up to a point. Pivots matter partly because many people watch them. They are reference levels, not predictions, and price regularly passes straight through them.
• Combine with context. Pivots are often used alongside other technical analysis tools. Our guide to support and resistance explains how levels are used and misused.