The Technical Confluences Indicator showed that the recent fall of the EUR/USD was powerful as it breached a critical cluster of support lines at $1.2360. This opens the door to dropping to much lower levels as support lines are few and far between.
The $1.2360 region is the congestion of the Simple Moving Average 50-1h, the SMA200-15m, the Fibonacci 23.6% one-week, the Fibonacci 38.2% one-month, the Bolinger Band 15m-Upper (Stdv. 2.2), the Fibo 38.2% one-day, the SMA10-4h, and the SMA5 one day.
The pair had some support levels spread out on the way down but worked its way through them. The next confluence of support lines is around $1.2260, which consists of the one-week low and the Pivot Point one-week S1. The one-month low at $1.2210 is next.
In case the pair turns up, there is a lot of resistance to the upside. All in all, the path of least resistance is to the downside.
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.
No Comments