GBP/USD path of least resistance is down as May loses control — Confluence Detector
The GBP/USD is trading below 1.3000 once again, amid concerns about Brexit negotiations and the political future of PM Theresa May. What's next?
The Technical Confluences Indicator shows that the pair faces fierce resistance at 1.2983. This is the convergence of the Simple Moving Average 5-15m, the Fibonacci 61.8% one-day, the SMA 5-1h, the SMA 10-4h, and the Fibonacci 61.8% one-month.
A break above that cap opens the door to 1.3050 which is the convergence of the Pivot Point one-day Resistance 1 and the one-day high. The most robust resistance is at 1.3104 where we see a dense cluster that consists of the Fibonacci 38.2% one-week, the Fibonacci 38.2% one-month, the SMA 10-one-day, the SMA 50-3h, the Bolinger Band 4h-Upper, the SMA 200-4h, the SMA 200-1h, and the PP one-day Resistance 2.
Looking down, support confluences are few and far apart. 1.2929 is the meeting point of the PP one-day Support 1, the BB 4h-Lower, and the one-day low.
Further below, the 1.2888 level is a more significant cushion where we see the Pivot Point one-week Support 2, the PP one-day S2 and the Fibonacci 161.8% one-day.
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.
