EUR/USD path of least resistance is down ahead of the Powell and the NFP – Confluence Detector

EUR/USD is trading around 1.1400 on the first Friday of 2019, sticking to familiar ranges seen in late 2018. The Non-Farm Payrolls report and an all-important speech by Fed Chair Jerome Powell are due later. What levels should we watch on euro/dollar?

The Technical Confluences Indicator shows that the pair is trading around the 1.1390 area which is a juncture of several technical lines including the Simple Moving Average 200-15 minutes, the Fibonacci 23.6% one-day, the Bollinger Band one-day Middle, and more. 

1.1425 serves as an initial hurdle as it is the convergence of the BB 4h-Middle, the SMA 100-1h, the SMA 5-1d, and the BB 1h-Upper. 

Further above, the hard cap is at 1.1485 where we note the potent 100-day SMA, the BB 1d-Upper, the PP 1d-R2, and last week's high. It will be tough for the pair to move above this level.

Looking down, support is slightly weaker. 1.1355 is the confluence of the BB 1h-Lower, the Fibonacci 61.8% 1m, last week's low, and the Fibonacci 61.8% one-day.

The path low is full of minor cushions, but significant support awaits only at 1.1272 where we see the meeting point of last month's low, the PP 1d-S2, and the Fibonacci 161.8% one-week.

All in all, resistance lines are more substantial than support lines.

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