After poor UK GDP knocked the GBP/USD lower, the Technical Confluences Indicator shows that clusters of support levels are far and few between. The $1.3745 level may be a more significant one: it is the meeting point of Pivot Point one-week S2 and the Pivot Point one-month S1, both significant long-term levels.
A move below this convergence level may trigger a free-fall.
Looking up, a dense congestion of lines awaits at $1.3860. This area consists of the Bolinger Band one-day-Lower, the SMA5-15m, the SMA100-one-day, and the Bolinger Band 1h-Lower. Higher above, the $1.3910 level is the confluence of the SMA5-4h, the Fibonacci 61.8% one-month, the Fibonacci 23.6% one-day and more.
The pair is currently in the middle of the range with well-defined levels on both sides.
Here is how it looks:
The Confluence Detector finds interesting 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.