EUR/USD clearer way up once the current area is cleared – Confluence Detector
|Resurgent risk appetite and central banks’ imbalances had sent the EUR/USD pair just above 1.1180, it’s highest since early August. The pair has cleared multiple resistances, now supports, after a dovish Fed, a balanced ECB, and more relevantly, following news suggesting the US and China are close to a deal. Boris Johnson’s outstanding victory in UK elections added to the bullish case of the shared currency.
The Technical Confluences Indicator shows that, for the EUR/USD pair, the path is clear to the upside as there’s only a medium relevant resistance at around 1.1220, where it bottomed in 2018. Around the level, there are other significant indicators that reinforce the area. Nevertheless, and once clear there’s nothing in the way toward the 1.1300/10 price zone.
Things are a bit more complicated for bears, with intraday highs and the 20 DMA at around 1.1150, providing an immediate support. A stronger one comes at 1.1120, where the pair topped in the previous week, and also has the 23.6% retracement of the October rally. Once below this last, 1.1065 is the next relevant level, although chances of a slide toward this last are limited.
Confluence Detector
The Confluence Detector finds exciting opportunities using Technical Confluences. The TC is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies.
This tool assigns a certain amount of “weight” to each indicator, and this “weight” can influence adjacents price levels. This means that one price level without any indicator or moving average but under the influence of two “strongly weighted” levels accumulate more resistance than their neighbors. In these cases, the tool signals resistance in apparently empty areas.
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