Technical analysis is looking at market data to determine future price trends.  A technical indicator offers a different perspective from which to analyze the price action. Some, such as moving averages, are derived from simple formulas and the mechanics are relatively easy to understand. Others, such as Stochastics, have complex formulas and require more study to fully understand and appreciate. Regardless of the complexity of the formula, technical indicators can provide unique perspective on the strength and direction of the underlying price action.

Technical Indicators can act as a confirmation, buy and sell signals, support and resistance, or prediction of a future price level.

• For example, the moving average indicator shows the average value of the currency pair of a set period of time.  Moving averages can give predictions to where the price may go and what price levels may act as support and resistance.