GBP/USD on the edge of a cliff and could fall to 1.3078 — Confluence Detector
Another defeat for the UK government in the House of Lords and the reports that the US wants to impose new tariffs on $200 billion worth of Chinese goods weighs on Sterling. Where can it fall to?
The Technical Confluences Indicator shows that the area of 1.3200-13210 is an area of struggle for GBP/USD as it is the convergence of the one-month low, the one-hour low, the Pivot Point one-day Support 2, and other lines.
Should the pair lose this level, support lines are few and far between. Substantial support is only at 1.3078 which is the confluence of the Pivot Point one-week Support 2 and the potent Pivot Point one-month Support 1.
Recovering would be hard as the pair may run into resistance at 1.3230 which is the confluence of the Bolinger Band one-hour Lower, the BB one-day Lower, the 1d-high, the Simple Moving Average 5-15m, and the Pivot Point one-day Support 1. Further above, 1.3264 is the meeting point of the SM 200-15m, the SMA 50-1h, the SMA 10-4h, and the Fibonacci 61.8% one-day. There are plenty of other robust resistance lines above.
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.
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.
