GBP/USD has more room to the downside after the downfall— Confluence Detector
GBP/USD has fallen sharply as the EU and UK seem far apart on a post-Brexit agreement. How is the currency pair technically positioned?
The Technical Confluences Indicator is showing that pound/dollar has support at 1.2955, which is the convergence of the Bollinger Band 4h-Lower, the previous monthly low, and the BB one-day Lower.
If it loses that line, the next cushions are weak. The next noteworthy support line is at 1.2901, which is where the 100-day Simple Moving Average meets the Pivot Point one-week Support 2.
Resistance is robust. At 1.3036 we find the confluence of the Fibonacci 23.6% one-day, the Fibonacci 23.6% one-month, and the SMA 100-15m.
Further above, GBP/USD faces major resistance at the 1.3063 to 1.3077 range. The dense cluster includes the Fibonacci 38.2% one-day, the BB one-day Middle, the Fibonacci 61.8% one-week, the SMA 5-one-day, the SMA 200-4h, the SMA 100-1h, and more.
All in all, the path of least resistance is down.
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.
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