EUR/USD path of least resistance is down ahead of key data – Confluence Detector
|EUR/USD is trading around 1.1200, off the highs it had experienced earlier this week. German GDP has come out as expected and euro-zone growth data is now expected. More importantly, US retail sales are due later in the day. How is the currency pair positioned?
The Technical Confluences Indicator shows that euro/dollar faces stiff resistance at 1.1219 which is a dense cluster of lines including the Simple Moving Average 5-1d, the SMA 100-15m, the Fibonacci 38.2% one-day, the Fibonacci 38.2% one-week, the SMA 10-4h, the SMA 100-1h, and more.
If it breaks higher, it faces many caps on its way up and the potential upside target is 1.1330 where the Pivot Point one-month Resistance 1, the previous monthly high, and the SMA 100-1d converge.
Looking down, support awaits at 1.1166 which is the confluence of the Fibonacci 23.6% one-month, previous weekly low, and the PP 1d-S2.
If EUR/USD extends its fall, 1.1115 is the net target. It is the convergence of the PP 1m-S1, the previous monthly low, and the Fibonacci 161.8% one-week.
All in all, resistance is stronger than support, pointing to potential falls.
Here is how it looks on the tool:
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. These weightings mean 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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