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GBP/USD jump found its limits

The GBP/USD jumped from the lows after a report that the UK might stay in the Customs Union. Where next?

The  Technical Confluences Indicator  shows that there is a good reason why the pair stalled around $1.3550. A congestion of significant resistance lines awaits at $1.3560: the Pivot Point one-day Resistance 2, the Fibonacci 38.2% and the one-day high converge there. A bit lower, $1.3546 is the confluence of the Simple Moving Average 200-1h, the SMA 50-4h, the 4h-High, and the 1h low.

In the broad scheme of things, high resistance awaits at $1.3623 which is the meeting point of the one-week high and the all-important Pivot Point one-week R1.

On the downside, a dense cluster of potent support lines awaits at $1.3460: the one-day high, the one-month low, the one-week low, and the Bolinger Band one-hour Lower (Stdv. 2.2).

This is how it looks on the tool:

GBP USD technical confluence chart May 17 2018

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

Yohay Elam

Yohay Elam

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.