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EUR/USD Faces Fierce Resistance, Downside More Attractive Confluence Detector

This article originally appeared on FXStreet.

The EUR/USD reached the $1.1760 target discussed yesterday and bounced. However, an extended recovery will be very hard from here, and it will be easier to fall. 

The Technical Confluences Indicator shows a dense cluster of resistance lines around $1.1822. This is the convergence of the Bolinger Band 15m-Middle, the Simple Moving Average 5-15m, the SMA 10-4h, the SMA 10-1h, the Fibonacci 61.8 percent one-day, the SMA 5-1h, and the Pivot Point one-month Support 2. The concentration of such potent lines means the pair will find it very hard to move higher. 

On the other side, congestion of support lines awaits around $1.1767. This is the meeting point of the Pivot Point one-day Support 1, the one-day High, and the PP one-week Support 2. Further down, the pair faces some scattered levels of support just above $1.1700, but no substantial clusters. 

On the topside, the next resistance is at $1.1860, which is the convergence of the Pivot Point one-day Resistance 1, the one-day high, and the Fibonacci 23.6 percent one-week. Additional lines of resistance are seen around $1.1900, and these are considerably stronger levels.

As in previous days, the pair faces much more resistance than support. 

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. These weightings mean 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.

Learn more about Technical Confluence