USD/JPY faces an uphill battle to recover – Confluence Detector

The USD/JPY staged a minimal recovery after the Fed decided to raise rates but slightly reduce forecasts. However, a further recovery seems limited. 

The Technical Confluences Indicator shows that dollar-yen faces resistance at 112.45 where we see a dense cluster of technical resistance lines including the Simple Moving Average 50-15m, the Bollinger Band one-day Lower, the SMA 10'4h, the SMA 100'1d, the BB 15min'Middle, and the Fibonacci 38.2% one-day.

If USD/JPY crosses that line, it will see another substantial convergence of resistance lines at 113.02 where we see the SMA 5-1d, the SMA 50-1d, the Pivot Point 1d-Resistance 2, and the SMA 10-1d ahead of the SMA 200-1h, the Fibonacci 61.8% one-month, and the SMA 100-4h.

Looking down, we see only weak support. One noteworthy cushion is 111.67 where we see the PP one-week S2 and the PP one-week S3.

Further down, we see the Fibonacci 161.8% one-week and the Pivot Point one-month Support converge at 111.38.

All in all, the path of least resistance is to the downside.

Here 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. These weightings mean 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