The pound has one strong support line left before it’s a free-fall


The GBP/USD remains under immense pressure as the US Dollar storms the board. The Technical Confluences Indicator shows a dense cluster of support around $1.3915. This is the convergence of many significant technical levels: the Fibonacci 61.8% one-month, the Bolinger Band one-day Lower (Stdv. 2.2), the BB 1h-Lower, the one-day high, and more.

Below this line, the pair only has just a few support lines which are few and far between. The PP one-week S1 at $1.3871, the SMA100-1d at $1.3842, and several others, but no line is really strong.

On the topside, the pair faces strong resistance around $1.3955, which is a congestion of the Fibo 23.6% one-day, BB 15m-Upper, the SMA5-4h, the BB 1h-Upper, the Fibo 38.2% one-day, and more. In general. Further above, $1.3990 fiercely defends the $1.4000 level, with the confluence of the SMA200-15m, the SMA50-1h, the Fibo 61.8% one-day, and the one-week lows.

All in all,  there are many more resistance lines than support ones, they are stronger and better concentrated. The path of least resistance is to the downside.

Here is how it looks:

GBP USD technical analysis April 24 2018

Confluence Detector

The Confluence Detector finds interesting 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 Confluences

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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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