GBP/USD hangs onto support and looks vulnerable— Confluence Detector

GBP/USD is leaning lower as uncertainty about Brexit continues and as global trade tops the Trump-Xi Summit agenda. What's next?

The Technical Confluences Indicator shows that cable has support at around 1.2780 which is a dense cluster of technical levels including the Bollinger Band 15 minute Lower, the Fibonacci 23.6% one-day, the Simple Moving Average 5-4h, the BB 1h-Middle, the BB 4h-Middle, the BB 15m-Middle, the SMA 10-15m, and the SMA 10-1h. 

Losing this level opens the doors to a gradual drop with substantial support awaiting only at 1.2700 where we see the convergence of the Pivot Point one-day Support 2 and last month's low.

Recovering from the current trading zone is not easy either. At the round number of 1.2800, we see the confluence of the SMA 10-4h, the Fibonacci 38.2% one-day, the SMA 5-one-day, and other lines that inhibit any movement. 

In case GBP/USD runs above 1.2800, fierce resistance awaits at 1.2830 where we see the Fibonacci 38.2% one-week, the Fibonacci 23.6% one-month, and the Pivot Point Resistance 1 converge.

All in all, the path of least resistance is to the downside. 

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.

Learn more about Technical Confluence