GBP/USD has been dragged lower as Brexit talks saw "ongoing divergence" and as rising US coronavirus cases boosted the US dollar. As the UK extends its reopening and pubs reopen, does cable have room to recover? Technicals suggest it may run into trouble.
The Technical Confluences Indicator is showing that GBP/USD is capped at 1.2466, which is the convergence of the Fibonacci 61.8% one-week, the Bollinger Band 15min-Lower, the Simple Moving Average 50-1h, and the SMA 200-15m.
Fiercer resistance awaits at 1.2485, which is a dense cluster of lines including the SMA 100-15m, the Pivot Point one-week, the Fibonacci 38.2% one-day, the Fibonacci 23.6% one-day, the Bollinger Band 1h-Middle, the SMA 10-4h, and several other lines.
Support is found at around 1.2402, which is the confluence of the SMA 5-one-day, the Fibonacci 38.2% one-week, and others.
Further down, GBP/USD bears may target 1.2370, where the PP one-day S3 and the Fibonacci 23.6% one-week converge.
This is how it looks on the tool:
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.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.