USD/CAD has lots more room to the downside after the big break — Confluence Detector
The Technical Confluences Indicator shows that the USD/CAD broke under a dense cluster of technical support levels around C$1.2915 on its way down. This level is the confluence of the SMA50-15m, the SMA-10-4h, the SMA5-1h, the SMA10-1h, the SMA200-15m, the Bolinger Band 1h Middle-Stdv, the SMA100-15m and more lines. This dense cluster now turns in strong resistance.
The pair fell quickly as there was little resistance on the way. The 1.2808 level is the 1 week low but it may not be enough to hold the pair.
The pair still has a lot of room to the downside, with significant resistance awaits only at 1.2710, where the Fibo 23.6% 1 meets the Pivot Point 1w S2.
All in all, the pair may extends its falls to much lower ground after the big drop to the downside.
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.
