A resurgent dollar has sent the EUR/USD pair just below 1.1180 toward its lowest since early June. Despite no follow-through at the time being, the bearish case has gained adepts, as the fundamental background backs a downward extension. Market players are pricing in more measures from the ECB, to be announced later this week, while considering odds that the US Federal Reserve will cut rates by just 25bps in its upcoming monetary policy meeting by the end of the month.
The Technical Confluences Indicator shows that, for the EUR/USD pair, the path is clear to the downside as there’s only a medium relevant support at around 1.1160, as the pair has early June low there and the lower end of the daily Bollinger Band. At around the yearly low of 1.1106, the pair has the S3 of the weekly pivot point, so the pair may bounce from the region if it´s reached.
Things are a bit more complicated for bulls, as between 1.1220 and 1.1250 there are plenty of relevant indicators providing resistance, with the monthly PP S1 and a critical Fibonacci level converging around the lower end of the mentioned range. Bulls could have a chance only if the pair manages to recover above the 1.1240/50 price zone.
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.
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