The pound’s rally could take a breather

The GBP/USD enjoyed the news that Brexit talks will be going on non-stop and also the dollar’s weakness. However, it may run into some hurdles now.

The Technical Confluences Indicator shows that the 1.2918 level is a dense cluster of resistance lines including the Pivot Point one-week Resistance 2, the 4h-high, the Bollinger Band 15m-Upper, the 1h-high, the BB 4h-Upper, the Simple Moving Average 5-15m, the SMA 50-15m, the SMA 10-1h, the BB 15m-Middle, and the SMA 5-1h.

Should the pair overcome this level, the next cap is quite close: 1.2938is the confluence of the Pivot Point one-month Support 1, the Bolinger Band one-day Middle, the one-day high, and the BB 1h-Upper.

Some support is found at 1.2878 which is the meeting point of the Fibonacci 38.2% one-day and the SMA 5-4h.

However, more serious support awaits only at 1.2743 which sees the convergence of the SMA 50-4h, the SMA 200-1h, the Pivot Point one-day Support 2, and the all-important Pivot Point one-month Support 2.

All in all, the path of least resistance is to the downside.

This 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. 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