GBP/USD is on the edge of critical support – Confluence Detector
GBP/USD has kicked off the week below 1.22 amid a bank holiday in the UK and in the US. How is cable positioned on the chart?
The Technical Confluences Indicator is showing that pound/dollar is hovering around critical support at around 1.2164, which is the convergence of the Fibonacci 61.8% one-week, the previous daily low, the previous monthly low, and the Bollinger Band one-hour Lower.
If sterling loses that line, the next cushion is only at 1.2081, and it is relatively weak. It is the meeting point of the Pivot Point one-day Support 3 and the previous weekly low.
Some resistance awaits at 1.2182, which is the confluence of the BB 1h-Middle, the Fibonacci 23.6% one-day, the BB 15min-Middle, and the Simple Moving Average 100-15m.
The next cap is at 1.2220, which is where both the SMA 5-one-day and the PP one-day R1 hit the price.
Further up, 1.2296 is a strong resistance line, where the PP one-day R3, the PP one-month S1, and the previous weekly high converge.
This 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. 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.
