Last week, we were discussing the best times to use double zeros.
I argued: Not when price is making recent new highs and new lows, but rather, when price has been ‘sloshing around' the zeros for a while and is already in an underlying trend. Today, I caught a good example of this, and thought it was worth mentioning here.
EUR/USD found some uncharacteristic buying pressure early in the US session today and made a quick attempt for the zeros at 1.3900. They worked this time, and priced faded, as we've seen many times before in this kind of situation.
I'm not a fan of using double zeros when price is making new highs and new lows. Others might argue, but typically you'll see a stack of retail orders lined up around these areas (eg to sell in an uptrend) ready to get taken out and feasted upon by an eager crowd of overeager buyers.
Unless there is a strong reason around these areas (when price is making new highs and lows that haven't been seen in a long time) in the form of some fierce support and resistance or other major retracements, will I usually look to fade them.
An example when EUR/USD was on its way to new highs: