USD/CAD breaks below dense support level, may have lots more room to fall — Confluence Detector
The Technical Confluences Indicator shows that the plunge that the USD/CAD took breaks a key confluence cluster of support at 1.2762. This is the meeting point of the Fibonacci 61.8% one day, the Bolinger Band 15 minute Lower (Stdv 2.2), Pivot Point one month S1, and the 15 and one-hour highs. This level now turns into support.
After breaking below this line, the pair continues lower. The next significant cluster of support is only at 1.2695, where the Fibo 161.8% one day, the SMA100- one day and the Pivot Point one-week S1 meet. All are critical technical indicators.
Further down, serious support is only around 1.2610, where the Fibo 161.8% one month and the Pivot Point one-week S2 meet.
The upbeat Quarterly BOC Business Outlook is behind the move. The Canadian central bank is somewhat optimistic and this boosts the Canadian Dollar. The optimism is also visible on the technical charts:
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.
