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If this resistance holds, EUR/USD could be in for a huge plunge

The EUR/USD is recovering from the lows as the US Dollar gives ground. Is this recovery real or just a dead cat bounce?

The  Technical Confluences Indicator  shows that a dense and potent cluster of resistance awaits at  1.1747. This is the convergence of the Simple Moving Average 50-1h, the SMA 200-15m, the Fibonacci 61.8% one-day, the one-month low, and the one week low.

Should the pair have enough momentum to break higher,  1.1820  is the confluence of the Pivot Point one-month Support 2, the SMA 10-1d, and the Bolinger Band one hour Upper (Stdv. 2.2).

The pair may have a battle in both directions around  1.1723  which is the meting point of the SMA 5-15m, the Bolinger Band one-hour Upper, the Fibonacci 38.2% one-day, Bolinger Band 15m-Upper, and the SMA 10-15m.

Yet below 1.1723, it may be a painful free-fall plunge all the way to  1.1595. This the first strong cluster featuring the Pivot Point one-month Support 3 and the Pivot Point one-week Support 2.

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. 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.

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.