GBP/USD looks set for more falls — Confluence Detector

Yohay Elam FXStreet

GBP/USD is trading around 1.2900 after surrendering to the dollar and as cross-party Brexit talks are not going anywhere fast. The technical levels look bearish.

The Technical Confluences Indicator shows that cable faces resistance at 1.2923 which is the convergence of the Fibonacci 38.2% one-day, the Bollinger Band 1h-Middle, and the BB 1d-Lower.

Further above, fierce resistance awaits at 1.2963 which is a dense cluster including the Simple Moving Average 5-1d, the BB 4h-Middle, the BB 1h-Upper, the SMA 100-1d, the SMA 200-1d, the previous daily high, and the SMA 100-1h.

The door to the downside is more open. Some support is at 1.2890 which is the confluence of the BB 4h-Lower, the previous 4h-low, the BB 1h-Lower, the Pivot Point one-week S2, and the previous daily low.

If GBP/USD loses this line, the downside target is 1.2802 where the PP 1d-S3 meets the PP 1w--S3.

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

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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