GBP/USD picked the low-hanging fruit, but now faces tough resistance — Confluence Detector
GBP/USD kicked off the new trading week with a Sunday gap and is trading around 1.2900. Can it extend its gains? Not so fast.
The Technical Confluences Indicator shows that cable faces a dense cluster of resistance lines at 1.2925, where we see the Fibonacci 38.2% one-month, the Simple Moving Average 200-4h, the Bollinger Band 15 minutes Upper, the SMA 5-15m, the SMA 10-1h, the SMA 10-1d, the SMA 10-15m, and the BB 15-minute Middle.
If the pair breaks to higher ground, the next cap is close. At 1.2977 we see the convergence of the Pivot Point one-day Resistance 2 and the PP one-week Resistance 1.
Looking down, some support awaits at 1.2876-1.2895 area where we see the previous 4h low, at SMA 50-4h, the SMA 200-1h, the Fibonacci 23.6% one-day, the SMA 100-1d, and the BB 1h-Middle converge.
Further down, support awaits at 1.2823 which is the meeting point of the Fibonacci 23.6% one-week and the Pivot Point one-day Support 1.
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.
