GBPUSD and the importance of round numbers
Round numbers have a special place in the technical analyst's toolkit. They just work.
Whether it is for the comfort of setting the order with the numbers ending with zeroes, or just a psychological effect, they clearly do work!
Check purple circles: three times, the price bounces of 1.36000 and uses it as a launchpad next time
Check green circles also: twice, the price has shown a significant resistance. You might even say three times, although the first instance isn't necessarily related to this level as it burst through far.
If you go further right, you will see more examples like this.
My expectation is that we see a tradeably-sized drop from 1.36000 This is where 200 SMA lies too. That is one horizontal resistance emboldened by a dynamic one.
We might not see very recent reactions to 200 SMA on the left, but it is one of the basic Moving Average levels that many respect. Hence, I would still consider it an improvement on top of just price action.
I would like to see a good reaction first. Be it a big shadow, a kangaroo tail, perhaps. I would take either of them as well as lower timeframe signals.
What makes this pair even better to trade now is the fact that it is not 1.36 only that the market may react to next week. The previous recently-reacting round number of 1.35000 still has only one candle closed on top of it. Might awaken too!
Whether it is for the comfort of setting the order with the numbers ending with zeroes, or just a psychological effect, they clearly do work!
Check purple circles: three times, the price bounces of 1.36000 and uses it as a launchpad next time
Check green circles also: twice, the price has shown a significant resistance. You might even say three times, although the first instance isn't necessarily related to this level as it burst through far.
If you go further right, you will see more examples like this.
My expectation is that we see a tradeably-sized drop from 1.36000 This is where 200 SMA lies too. That is one horizontal resistance emboldened by a dynamic one.
We might not see very recent reactions to 200 SMA on the left, but it is one of the basic Moving Average levels that many respect. Hence, I would still consider it an improvement on top of just price action.
I would like to see a good reaction first. Be it a big shadow, a kangaroo tail, perhaps. I would take either of them as well as lower timeframe signals.
What makes this pair even better to trade now is the fact that it is not 1.36 only that the market may react to next week. The previous recently-reacting round number of 1.35000 still has only one candle closed on top of it. Might awaken too!
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