GBP/USD path of least resistance is up on a busy day — Confluence Detector
After the GBP/USD traded quietly, things are heating up with UK jobs and the testimony by Fed Chair Jerome Powell. Which direction will the pair choose? There is more room up than down.
The Technical Confluences Indicator shows that a dense cluster of support awaits at 1.3240, which is the convergence of the Simple Moving Average 10-one-day, the SMA 50-15m, the SMA one-hour, the Bolinger Band 15m-Middle, the SMA 50-4h, the SMA 10-4h.
There are further technical levels above and below, but the next dense confluence is at 1.3220 which is the meeting point of the Bolinger Band one-hour Lower, the BB one-hour-Middle, the one-day, the SMA 200-15m, the SMA 50-1h, the Fibonacci 38.2% one-month, and the Bolinger Band one-day Middle.
The next support line is not that far at 1.3171 which is the convergence of the Fibonacci 161.8% one-day, the Pivot Point one-day Support 2, and the Fibonacci 23.6% one-week.
Looking up, 1.3268 is an immediate hurdle with the Fibonacci 38.2% one-day, the Fibonacci 61.8% one-week, and the Simple Moving Average 200-4h.
The next hurdle is only at 1.3223 which is the convergence of the Bolinger Band one-day Upper, the SMA 50-one-day, the Pivot Point one-day Resistance 2, and the Fibonacci 61.8% one-month.
All in all, there is more support than resistance.
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.
