Technical Confluences Detector

What is the Technical Confluences Detector?

The FXS Technical Confluences Detector is an in-house tool, developed by FXStreet experts, that allows you to identify those price levels where congestion of indicators like moving averages, Fibonacci levels, Pivot Points occurs. Knowing where these congestion points are located is very helpful as it allows the trader to see these areas of support and resistance easily.

This tool is customizable so you can choose the asset selectors and the time frame that are more suitable for your trading operations.

Gold’s path of least resistance is down, levels to watch

Gold price stays volatile so far this week, with the risks skewed to the downside, as the bright metal remains at the mercy of the Omicron covid variant fears and Fed sentiment. Fed Chair Jerome Powell’s hawkish surprise and the new variant updates triggered massive bond market volatility, impacting the dollar valuations alongside gold price.

Gold Price: Key levels to watch

The Technical Confluences Detector shows that the gold price is battling strong resistance at $1,780, which is the convergence of the previous week’s low and Fibonacci 23.6% one-day.

Gold price will then extend its recovery towards the next relevant resistance aligned at $1,785, the confluence of the Fibonacci 38.2% one-day, SMA5 one-day and SMA10 four-hour.

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What are the Technical Confluences Detector?

HOW DOES IT WORK?

CONFLUENCE OF TECHNICAL LEVELS

This tool assigns a certain "weight" to each indicator according to its class and time range. This "weight" is propagated to adjacent price levels – even if those levels do not contain any indicator – to highlight the influence of the force of attraction generated by the presence of important indicators such as a simple moving average or a Pivot Point level in a daily range. The algorithm's logical structure intensifies the signal's strength in those areas where several indicators converge – so-called technical confluence zones.

HOW TO READ THE CHART?

The tool detects and draws the price levels where indicators are placed, highlighting those levels where several indicators converge simultaneously. The length of each bar indicates the intensity of the resistance or support levels generated by the technical indicators. We have also implemented a color gradient to intensify the bars' tonality where the Technical Confluences Detector finds more resistance to price advance. The white lines represent areas where no technical indicator is detected and where the price can move with ease.

TOOLTIP

You can see which indicators are within each price level by placing the cursor over the bar price level. The explanation uses a code that indicates:

Previous daily, weekly and monthly highs and lows.
Pivot Points
Moving averages
Bollinger bands
Fibonacci retracements

HOW TO USE IT?

With the FXS Technical Confluences Detector tool, you can quickly locate the areas where the price can find a support or resistance zone and make trading decisions. If you are a short-term trader, you will find entry points for counter-trend strategies and hunt a few points at a time. If you are a medium-to-long-term trader, this tool will allow you to know in advance the price levels where a medium-to-long-term trend may stop and rest, where to unwind positions, or where to increase your position size.