EUR/USD path of least resistance is down on Fed Day – Confluence Detector
The EUR/USD has dropped ahead of the Fed and has a better chance of falling than rising as markets await the big decision.
The Technical Confluences Indicator shows that strong resistance awaits the pair at 1.1752, which is a dense cluster of the Simple Moving Average 5-15m, the SMA 5-1h, the SMA 200-1h, the SMA 50-4h, the Fibonacci 23.6% one-day, and more.
If the pair overcomes this level of resistance, 1.1777 is next. This is the convergence of the Simple Moving Average 5--one day, the SMA 10-4h, the SMA 200-15m, the SMA 50-1h, the Fibonacci 38.2% one-week, and the SMA 5-4h.
There are quite a few more levels to the upside but the really critical support line is at 1.1869 which is the confluence of the Bolinger Band one-day Upper, the Fibonacci 61.8% one-month, and the Fibonacci 161.8% one-day.
Looking down, the pair has support at 1.1734 which is the meeting point of the Fibonacci 38.2% one-month, the one-day high, and the Fibonacci 61.8% one-week.
Yet if it loses the line, the next support line is only at 1.1648, the confluence of the one-week low and the Fibonacci 23.6% one-month.
All in all, resistance is stronger and denser while support is sparse.
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.
