EUR/USD faces a wall of resistance as markets digest Lagarde's nomination – Confluence Detector
EUR/USD has been under pressure below 1.1300 and may have a hard time recapturing this level. Markets are digesting the nomination of IMF MD Christine Lagarde to lead the European Central Bank – and she may extend the dovish stance of incumbent Mario Draghi. What technical levels should we watch?
The Technical Confluences Indicator shows that EUR/USD faces an area of resistance starting from 1.1296 and culminating at 1.1319. It is a dense cluster of lines including the Pivot Point one-day Resistance 1, the Fibonacci 38.2% one-month, the Simple Moving Average 100-4h, the Fibonacci 23.6% one-day, the Fibonacci 38.2% one-day, the Bollinger Band one-hour Upper, the PP one-week S2, the SMA 50-1h, the BB 1d-Middle, the SMA 10-4h, the Fibonacci 61.8% one-day, and more lines.
If the world's most-popular currency pair exceeds this level, some resistance awaits at 1.1343 where we see the convergence of the SMA 5-1d, the SMA 200-1d, and the PP 1d-R2.
Looking down, weak support awaits at 1.1250 where we note the confluence of SMA 200-4h and the Fibonacci 61.8% one-month.
Further down, even weaker support awaits at 1.1219 where the Pivot Point one-month S1 meets the SMA 50-1d.
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.
Author
Yohay Elam
FXStreet
Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.
