When analyzing the Euro vs dollar (EUR/USD) WD Gann recommends watching for price to react at or near round numbers such as 1.3000, 1.3500 and 1.4000 as shown on the chart below. The reason that price has a tendency to reverse at these round numbers is the "psychological element". People whom are dealing / buying and selling will have a tendency to trade at or near these major levels, which in turn causes price to be supported or resisted at these levels.
The current daily chart below shows quit a few reactions to these levels over the last few months.
These reactions occur in all markets as human psychology applies across the board.
More Practical Application
Learn more about WD Gann's technical analysis as applied to EUR/USD currency pair. Check it out at brainyforex here.
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