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.
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.