The EURAUD daily price action chart is looking to potentially test the major psychological Very Big Round Number (VBRN) in 1.4000. As I have often discussed in this blog; Big Round Numbers (BRN’s) and VBRN’s are another useful piece of information that a trader needs to use in the overall price action story to put the whole chart together.
VBRN’s are the major numbers that come in 1,000 pip intervals which on the EURAUD would be 1.3000, 1.4000, 1.5000 etc., The reason Very Big Round Numbers are so important is because like I said at the start of this post; they act as major psychological levels in the market.
The two major reasons for this are, 1: Orders get placed all around the round numbers. People become super conscious of the round number the bigger they become. The bigger the level, the more the trader, organisation, business etc, notices it and normal orders get placed all around the VBRN making the VBRN like a magnet. For example; if the VBRN is 1.0000 all of a sudden traders notice it and traders all think differently. Some will want to keep it neat and will want to have their order bang on the 1.0000. Others will put in orders such as 0.9999 because they are avoiding the VBRN and this is how all of a sudden we get the magnet affect with price and the VBRN.
2: It becomes self-fulfilling, similar to number 1. Because traders become so aware of it, the bigger the level, the stronger it becomes and this is why the VBRN’s will often be the strongest levels.
As the daily chart shows below; this VBRN is a major level that is a proven level in it’s own right. Price has moved back higher, but as yet has not tested the VBRN. If price does move back higher once again, high probability short trades could potentially be on the cards at the VBRN and major resistance level.
For any potential short trades to be confirmed, traders would need to see quality A+ price action trigger signals like the trigger signals taught in the Forex School Online Price Action Courses. Traders could look for short trades on their intraday charts on time-frames such as the 8hr/4hr/6hr/2hr or potentially lower.
EURAUD Daily Chart
EURAUD 4 Hour Chart
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