The EUR/USD is trading in a limited range for a few days, refraining from falling to the downside despite Merkel’s announcement that she will not be running again and as the Italian crisis continues. Can it recover? Not so fast.
The Technical Confluences Indicator shows that the world’s most popular currency pair faces a dense cluster of substantial technical levels at 1.1390. These include the Simple Moving Average 5-4h, the Fibonacci 23.6% one-week, the Bollinger Band 4h-Middle, the SMA 100-1h, the Pivot Point one-day Support 2, the BB 1h-Upper, the BB one-day Lower, and the SMA 10-4h.
If this level is overcome, the EUR/USD may run into several levels of resistance but the most significant cluster is only at 1.1475 where we see the Fibonacci 61.8% one-week and the Fibonacci 61.8% one-day.
The pair is struggling with 1.1361 at the time of writing. This is the confluence of the PP one-month Support 2, the BB one-hour Lower, the Fibonacci 161.8% one-day, and the SMA 5-15m.
The last notable line is 1.1335 which was last week’s low, and the Fibonacci 161.8% one-month.
Here is how it looks on the tool:
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.