The EUR/USD dropped as the US Dollar stormed the board as July came to a close. In the wake of August, the technical picture looks bearish with the path of least resistance being to the downside.
The Technical Confluences Indicator shows that a dense cluster of resistance lines awaits around 1.1686. The area consists of the Bolinger Band 4h-Middle, the BB 15m-Middle, the 1h-high, one-day low, the Simple Moving Average 5-1h, the SMA 100-4h, the SMA 5-one-day, and a few others in the immediate vicinity.
Another significant hurdle awaits the pair close by. At 1.1710 we see the convergence of the Simple Moving Average 10-4h, the Fibonacci 38.2% one-day, the Fibonacci 38.2% one-month, the SMA 200-15m, the SMA 50-1h, the BB 1h-Middle, the Fibonacci 61.8% one-week, and the SMA 100-15m.
If the EUR/USD has enough momentum to break higher, the path is full of resistance lines to the upside, with the most notable confluence awaiting at 1.1795 which is last month’s high, the Pivot Point one-day Resistance 3, and the Fibonacci 161.8% one-day.
Looking down, there are no confluence lines of the same magnitude. 1.1625 is the meeting point of the last week’s low, the BB one-day-Lower, and the BB 4h-Lower.
Further down, 1.1575 is last month’s low and the Pivot Point one-month Support 1.
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.
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