GBP/USD ready to challenge new highs after gaping higher — Confluence Detector

Yohay Elam FXStreet

The GBP/USD kicked off the new week with a Sunday gap, trading on higher ground. Expectations for a Brexit deal are rising. What levels should we watch?

The Technical Confluences Indicator shows that cable faces immediate resistance around 1.3050 where we see the convergence of the Simple Moving Average 200-4h, the SMA 100-one-day, and the Fibonacci 61.8% one-month.

The next level to watch is 1.3125 which is the convergence of the Pivot Point one-day Resistance 3, the PP one-month R1, the Bollinger Band 4h-Upper, and the PP one-week R1.

Looking down, immediate support is at 1.2990, just under the round number of 1.3000. The cushion consists of the Fibonacci 38.2% one-day, the SMA 5-1h, the Bollinger Band 1h-Middle, the BB 15-Middle, the SMA 10-15m, the SMA 50-15m, and other levels.

The next support line is around 1.2915 which is a cluster including the Fibonacci 38.2% one-week, the Fibonacci 38.2% one-month, and the Bollinger Band 4h-Middle.

All in all, support lines are stronger than resistance ones. The path of least resistance is to the upside.

This is how it looks on the tool:

GBP USD technical confluence levels November 5 2018

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.

GBP/USD surrenders some gains, back to 1.3420

GBP/USD holds on to moderate gains above 1.3400 the figure on Friday. Optimism surrounding the UK government’s leadership transition and expectations of further BoE tightening support the British Pound, while easing tensions in the Middle East and fading Fed rate-hike expectations weigh on the US Dollar.

EUR/USD turns positive, targets 1.1450

EUR/USD now picks up pace and advances toward the 1.1440 region on Friday, up modestly for the day. With no major economic data due, lingering uncertainty over the US-Iran conflict keeps investors cautious, limiting the pair's upside.

Gold remains offered, still below $4,100

Gold struggles to extend Thursday’s rebound and navigates below the $4,100 mark per troy ounce on Friday. Uncertainty surrounding the Middle East conflict limits the precious metal’s upside, which is also under pressure amid rising US Treasury yields across the curve.

Week ahead – US CPI and Warsh testimony to take centre stage, BoC eyed too

US inflation report and Warsh testimony to headline the week. Dollar to dominate amid slew of other US data and Mideast tensions. Amid fresh Iran escalation, China GDP to shed light on Q2 impact. Bank of Canada not expected to follow RBNZ with rate hike.

Five sessions, one round trip: Why the whipsaw is exactly what Warsh ordered

Markets opened July with a December hike as the base case and spent five trading sessions unlearning and relearning it. A 57K payrolls print bled the tightening bets out of the strip; a re-shut Strait of Hormuz is pushing them back in. Wednesday's minutes from the June Federal Open Market Committee meeting landed mid-round-trip, describing a world that had already stopped existing.

Five sessions, one round trip: Why the whipsaw is exactly what Warsh ordered

Markets opened July with a December hike as the base case and spent five trading sessions unlearning and relearning it. A 57K payrolls print bled the tightening bets out of the strip; a re-shut Strait of Hormuz is pushing them back in. Wednesday's minutes from the June FOMC meeting landed mid-round-trip, describing a world that had already stopped existing.