GBP/USD has more room to fall than rise ahead of the NFP — Confluence Detector

Yohay Elam FXStreet

GBP/USD retreated from the highs as the US Dollar recovered from the lows it hit after the dovish Federal Reserve decision and as there is no imminent solution to Brexit. The focus now shifts to the US Non-Farm Payrolls report. What's next?

The Technical Confluences Indicator shows that the pair faces significant resistance at around 1.3124 where we see the convergence of the Bollinger Band 4h-Middle, the Simple Moving Average 100-15m, the SMA 5-4h, the Fibonacci 61.8% one-day, and the Fibonacci 23.6% one-week.

More significant resistance awaits at 1.3220 where we see the all-important previous monthly high, previous weekly high and the Pivot Point one-day Resistance 3,

Looking down, support is close but weaker than the upside resistance. At 1.3090 we see the confluence of the SMA 50-4h, the Bollinger Band 15min-Lower, the BB 1h-Lower, and the SMA 200-1h.

At 1.3063 we find the juncture of the Fibonacci 161.8% one-day, the Pivot Point one-day S2, the BB 4h-Lower, and the Fibonacci 38.2% one-week.

All in all, the path of least resistance is down.

This is how it looks on the tool:

GBP USD Technical confluence February 1 2019

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

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.

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