GBP/USD Is Capped By Massive Resistance And Has More Room To The Downside — Confluence Detector

This article originally appeared on FXStreet.

The Technical Confluences Indicator shows that the GBP/USD will find it hard to break above $1.3750 which is a dense congestion of resistance lines: the Fibonacci 38.2 percent one-day, the Bolinger Band 15m-Lower, the one-month low, the one-week low, the SMA5-15m, the SMA10-15m, the SMA100-15m, and the Bolinger Band 15m-Middle. 

Should the pair break higher, it faces scattered levels of resistance and the most significant convergence of lines is at $1.3880. This is the meeting point of the Fibo 38.2 percent one-week, the Simple Moving Average 100-1h, the Pivot Point one-day R2, and the Fibo 161.8 percent one-day.

Looking down, support awaits at $1.3680, which is the confluence of the Pivot Point one-week S1, the Pivot Point one-day S2, and more. 

All in all, the path of least resistance remains to the downside. A failure to break above $1.3750 could lead to a significant downfall.

Here 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.