GBP/USD eyes 1.2265 as a downside target

GBP/USD  has been on the back foot and hit new two-years lows as concerns about a hard Brexit persist. What levels should we watch?

The  Technical Confluences Indicator  shows that GBP/USD’s next stop to the downside is  1.2338  which is the convergence of the Fibonacci 38.2% one-month, the Pivot Point one-week Support 1, and the Bollinger Band 1h-Lower.

Further down, the next cushion awaits only at  1.2265  which is the meeting point of the PP 1m-S3 and the PP 1d-S3.

Looking up, substantial resistance caps GBP/USD at  1.2382  where we see a dense cluster including the BB 15min-Upper, the BB 1d-Lower, the Simple Moving Average 5-4h, and the previous 4h-high.

Further up,  1.2415  is another considerable resistance cluster – among many – and it includes the Fibonacci 38.2% one-day, the SMA 10-4h, and the Fibonacci 23.6% one-week.

All in all, cable has more room to move to the downside than to the upside.

This 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.