EUR/USD path of least resistance up ahead of critical US CPI – Confluence Detector
EUR/USD has been gradually rising above 1.1300 as tension mounts toward the all-important US inflation report – a decisive event ahead of the Fed decision – that could rock the US dollar. The world's most-popular currency pair has more room to rise than fall.
The Technical Confluences Indicator shows that EUR/USD is hovering above a dense cluster of support lines at 1.1327. The lines include the Simple Moving Average 5-4h, the Fibonacci 38.2% one-day, the Bollinger Band 1h-Middle, the previous 4h-low, and the BB 15min-Lower.
The next support is even stronger. 1.1280 is the convergence of the powerful SMA 100-1d, the Fibonacci 38.2% one-week, and the Fibonacci 161.8% one-day.
On the other hand, resistance is weaker. The line to watch is 1.1368 which is the confluence of the Fibonacci 161.8% one-month and the 200-day SMA.
Further above, weaker resistance awaits at 1.1415 where we find the Pivot Point one-month R3 waiting for EUR/USD.
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.
