The pound plunge had quite a bit of force behind it

The Technical Confluences Indicator shows that the breakdown of GBP/USD below the $1.4220 region probably needed a lot of momentum. This is a cluster of many technical lines and the move to the downside opens the door to further losses. The $1.4220 level is the meeting point of the Bolinger Band 1h-Middle Stdv, the Bolinger Band 15m-Middle Stdv, the SMA50-15m, the SMA10-1h, the Fibo 23.6% 1d, the SMA-5-15m, a month high, one week high, the SMA100-15m, a 4h high and the SMA10-15m.

Undoubtedly, it is a very significant line and the move below this area is quite significant.

While there are quite a few levels worth mentioning on the way down, the only significant confluence of technical levels awaits at $1.4090, the meeting point of the Pivot Point 1d S2, the Fibo 61.8% 1month, and later, the SMA50-4h and the Bolinger Band Stdv.

On the topside, the pair has serious resistance only around $1.4342, the 52 weeks high. In general, the pair had to choose where to go around $1.4220 and decided to go down.

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

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