GBP/USD has been trading just below 1.2700 as MPs from the ruling Conservative Party prepare to choose between ten contenders to lead the party and the country. Where next for the pound? The downside seems more appealing.
The Technical Confluences Indicator shows that GBP/USD faces a wall of resistance in the 1.2705-1.2711 region. The dense cluster includes the Fibonacci 23.6% one-month, the Fibonacci 38.2% one-week, the Simple Moving Average 5-1d, the SMA 100-1h, the SMA 100-15m, the SMA 200-15m, the SMA 5-1h, the Fibonacci 23.6% one-day, the SMA 5-4h, and the Bollinger Band 4h-Middle.
If the pair manages to run higher, it will face several hurdles with 1.2797 standing out. It is the convergence of the Fibonacci 38.2% one-month, the Pivot Point one-week Resistance 1, and the PP 1d-R2.
Looking down, some support awaits close by, at 1.2684 where the previous daily low and the SMA 10-1d converge.
Further down, weak support is at 1.2611 where last week's low and the Bollinger Band 1d-lower meet.
This 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. This means 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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