GBP/USD has more room to the downside

Apr 08,2019 03:36   Source:Forex Crunch

GBP/USD is trading a bit higher at the wake of a new week that is centered on the EU Summit on Brexit. While most see some kind of resolution and upside potential for cable, it is under technical pressure, at least in the short term.

The Technical Confluences Indicator shows that GBP/USD is battling 1.3075 where a dense cluster of lines awaits it. This includes the Fibonacci 61.8% one-day high, the previous 4h-high, the Bollinger Band 15min-Upper, the Simple Moving Average 5-15m, and the Fibonacci 48.2% one-week.

If the pair makes the break, the next resistance line is already quite close. At 1.3122 we note a minefield of technical caps including the Fibonacci 61.8% one-week, the SMA 10-1d, the Fibonacci 38.2% one-month, yesterday’s high, the Bollinger Band 4h-Middle, the SMA 200-1h, and the PP 1d-R1.

Looking down, support is closer, but it is weaker. At 1.3040 we see the convergence of the Fibonacci 23.6% one-week, the SMA 50-15m, the SMA 5-4h, and the Fibonacci 38.2% one-day.

Further down, weak support awaits around 1.2985 where we see the confluence of the Pivot Point one-day S1, the SMA 200-1d, the previous daily high, the Bollinger Band 4h-lower, and the BB 1d-higher.

This is how it looks on the tool:

GBP USD technical confluence April 8 2019

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.

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