The AUD/USD pair is recovering from a daily low of 0.7030. It has been trading above the 0.7000 figure ever since last Thursday, holding on to gains despite broader dollar’s recovery and the poor performance of worldwide equities, a result of expectations of a “preventive” 25bps rate cut in the US.
The Technical Confluences Indicator shows that the AUD/USD pair is trading at a critical area, as in the current 0.7050 region, it has the 38.2% retracement of the previous weekly advance, alongside several intraday highs and shorter-term technical studies.
The next relevant resistance area comes between 0.7070 and 0.7080, where it also has multiple studies limiting advances. However, beyond the level, the picture turns clearer, with nothing relevant in the way ahead of 0.7173, April’s monthly high.
Looking down it seems there is no much room for bears at the time being, as the pair has multiple supports between the current level and 0.7020. Once below this last, things get a bit more clear, although only below 0.6980 sellers would have more chances.
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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