EUR/USD dead cat bounce opens the door to challenging the cliff at 1.1202 – Confluence Detector

EUR/USD fell sharply on a mix of bad news from Italy, Brexit concerns, and the ongoing strength of the US Dollar. While it bounced off the lows, there is some hesitance. What's next?

The Technical Confluences Indicator shows that the pair needs to overcome the 1.1272 level where we see the convergence of the Pivot Point one-month Support 1, the Bollinger Band 15m-Upper, the Simple Moving Average 5-15m and the previous high.

If EUR/USD makes a move higher, the next significant cluster is 1.1319 where we see the confluence of the Pivot Point one-day S1, the SMA 100-15m, and the previous day's low.

If it does not recover and the current bounce is only a "dead cat bounce", the next and last visible support line is at 1.1202 which is the meeting point of the Pivot Point one-month S1 and the PP one-week S2. 

And what's next? We do not see any support line, not only an absence of a cluster, at least until 1.1132. 

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.

Learn more about Technical Confluence