Support and resistance levels are key concepts in forex trading that help traders identify potential entry and exit points based on historical price levels. Support represents a price level where the currency pair tends to find buying interest and bounce higher, while resistance is a price level where selling interest is prevalent, causing the price to reverse lower. By identifying support and resistance levels on price charts, traders can make informed decisions on when to enter trades at support levels or exit trades at resistance levels. These levels act as barriers that can influence price movements and help traders anticipate potential market reversals or breakouts.