Basically, when I said major psychological price, that’s mean I am referring to rounded number like 1.000, 0.9000, o.8000 or 0.00050. But actually, there are another three types of major psychological price that traders should know. Read on.
Most Important Forex Psychological Levels:
USD/CHF = 1.000 will normally trigger actions by the Swiss National Bank to return the Swiss Franc to more “normal” levels trading above parity. Market moves can be quite aggressive at this level and spill to EUR/USD, given the Euro/Swissy correlation. Other currency pairs that are near parity in recent times are the Aussy (AUD/USD) and the Loonie (USD/CAD).
Rounded Numbers with double zeros (such as EUR/USD 1.3200), or even better with a triple of zeros (1.3000), are levels that a lot of people are waiting to jump into a trade. Many Pending Entry Orders and Target Take Profits are triggered right at those prices while protecting Stop Losses should stay in a safe distance allowing space for a bears-and-bulls battle and wicks caused by the triggering of more aggressive stops standing more closely.
Historical and Daily Levels
Historical highs and historical lows are always watched with anxiety while intraday traders normally respect the previous daily candle with more importance given to the previous day high and low. Also look for these levels on higher periods such as the weekly and monthly charts
Prices that appear on the Media
Hyped numbers or price levels that are on evidence are always a reason for traders to rethink their positions and create trade plans. Be cautious when the candles in your chart approach them.