GBP/USD is well-supported after Merkel's comment, eyes 1.2261 — Confluence Detector
GBP/USD has recovered after German Chancellor Angela Merkel opened the door to a solution on the controversial Irish backstop topic that the UK government opposes. Can sterling continue higher?
The Technical Confluences Indicator is showing that GBP/USD enjoys some support at 1.2141, which is the convergence of the Simple Moving Average 200-15m, the SMA 50-1h, the Fibonacci 38.2% one-day, the Fibonacci 23.6% one-week, and the SMA 100-15m.
Stronger support awaits at 1.2215, where we note the confluence of the Fibonacci 38.2% one-week, the SMA 5-1d, and the previous monthly low.
Looking up, only weak resistance awaits at 1.2180, where the Bollinger Band one-day Middle, the BB 15min-Upper, and the previous 4h-high converge.
The next target is 1.2211, where the BB 1h-Upper, the PP 1w-R1, and the PP 1d-R1 meet.
GBP/USD eyes 1.2261 as its upside target, where the PP 1d-R2 and the Fibonacci 23.6% one-month hit the price.
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.
