EUR/USD: Path of least resistance is to the downside - Confluence Indicator - levels to watch
|The Technical Confluences Indicator shows that the break below the cluster of indicators around $1.2319 leaves few technical barriers on the downside. This line was the confluence of the BB 1h Middle Stdv 2,2, the SMA10-15m, the BB 1h Lower Stdv 2.2 and Fibo 38.2% 1w. The level is wrapped with other confluences making it even stronger and it now switches into strong resistance.
While support to the downside is weak, here are a few notable levels that serve as the next targets.
- The $1.2281 level is the confluence of the Fibonacci 23.6% level on the monthly chart and a daily pivot point
- The $1.2261 level is a cluster of day high and a one week low.
- Below this line, there is hardly any line.
Here is how it looks with dense and stronger lines on the upside and fewer and weaker lines on the downside:
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.
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