GBP/USD has limited room to the upside — Confluence Detector
The GBP/USD jumped from the lows after a report that the UK might stay in the Customs Union. Where next?
The Technical Confluences Indicator shows that there is a good reason why the pair stalled around $1.3550. A congestion of significant resistance lines awaits at $1.3560: the Pivot Point one-day Resistance 2, the Fibonacci 38.2% and the one-day high converge there. A bit lower, $1.3546 is the confluence of the Simple Moving Average 200-1h, the SMA 50-4h, the 4h-High, and the 1h low.
In the broad scheme of things, high resistance awaits at $1.3623 which is the meeting point of the one-week high and the all-important Pivot Point one-week R1.
On the downside, a dense cluster of potent support lines awaits at $1.3460: the one-day high, the one-month low, the one-week low, and the Bolinger Band one-hour Lower (Stdv. 2.2).
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.
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.
