EUR/USD: Break or bounce at resistance convergence cluster?


The Technical Confluences Indicator, shows that the EUR/USD is approaching a resistance area where many critical technical levels converge. The $1.2325 level is where the SMA100-4h, the SMA200-4h, the Bolinger Band 1 day Middle (Stdv 2.2), BB 1h-upper, Pivot Point one-day Resistance 1, the SMA5-15m, and the BB 15m Upper all meet.

A break higher will open the door to the $1.2348 region where the there is another significant cluster featuring the one-week high, the Pivot Point one week R1, the PP one day R2, and the SMA50 one day meet.

A failure will open the door to the previous and choppy trading area around $1.2275 which has the SMA100-15m, the Fibo 61.8% one-month, BB one hour Middle, the SMA50, the SMA10-1h and more lines.

All in all, the lines to the upside are more apparent than those 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.

Learn more about Technical Confluence

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About Author

Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

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