GBP/USD path of least resistance is down ahead of the BOE – Confluence Detector

GBP/USD is on the back foot ahead of the all-important Bank of England rate decision due out on Thursday. How is cable positioned on the technical charts?

The Technical Confluences Indicator is showing that pound/dollar faces fierce resistance at 1.2554, which is the convergence of the Bollinger Band 1h-Middle, the Simple Moving Average 5-4h, the SMA 100-4h, the SMA 10-1h, the Fibonacci 23.6% one-week, the Fibonacci 61.8% one-day, and others.

Further above, another considerable cap awaits at 1.2606, which is the meeting point of the previous monthly high and the Fibonacci 38.2% one-week. 

Weak support awaits at 1.2514, which is where the previous daily low and the Pivot Point one-day Support 1 converge.

The downside target is 1.2405, which is the confluence of the Fibonacci 61.8% one-month and the Pivot Point one-week Support 1. 

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