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GBP/USD Has More Room to Fall Than to Rise as May Faces Challenges — Confluence Detector

?GBP/USD is trading around 1.2500, awaiting news related to the political future of PM Theresa May.
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FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market and was founded in 2000. The website offers a wide range of tools and resources: 24/5 currency news, real-time economic calendar, advanced rates and charts, educational webinars, analysis reports, forecasts, Learning Center, newsletters, industry services, FX customizable studies… As its distinctive trademark, the portal has always been proud of its unyielding compromise to provide neutral and unbiased information and to enable its users to take better and more confident decisions. FXStreet has managed to gain the collaboration of the entire Forex industry, from individual professionals and small companies right up to Forex Brokers and Investment Banks. FXStreet covers the FX Market 24/5: an expert team of journalists, traders and economists picture what the market is doing and what is happening as it happens. Besides the main website in English, the portal is available in 16 other languages (English, Japanese, Simplified Chinese, Traditional Chinese, Spanish, Russian, Arabic, Turkish, Indonesian, Portuguese, German, French, Italian, Hungarian and Vietnamese, Korean and Catalan). FXStreet was short listed as “Best e-FX initiative of the year (vendor)” for the FX Week e-FX Awards 2010.

GBP/USD is trading around 1.2500, awaiting news related to the political future of PM Theresa May. What do the charts say about the next moves?

The Technical Confluences Indicator shows that cable faces some resistance around 1.2550, where we see the convergence of the Simple Moving Average 100-15m, the SMA 10-4h, and the potent Fibonacci 38.2% one-day.

A move to the upside would be difficult, with several clusters of resistance limiting the movement. The most significant barrier is around 1.2590 where we see the confluence of the SMA 50-1h, the Fibonacci 61.8% one-day, the SMA 200-15m, and the powerful Pivot Point one-month Support 1.

On the downside, we see some feeble support at around 1.2478 which is the meeting point of the PP one-month Support 3 and previous daily low.

Significant support awaits only at 1.2432 where we see the PP one-month S2, the Bollinger Band 4h-Lower, and the PP one-day S1 converge.

All in all, resistance is more substantial than support for the GBP/USD currency pair.

This is how it looks on the tool:

GBP USD technical analysis

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.