USD/JPY – Obstacles corral USD/JPY and push it to an early resolution – Confluence Detector

USD/JPY moves in a range between $109.7 and $109 after recovering from late August lows.

The technical confluences tool helps us understand the magnitude of the barriers that are conditioning and will influence the movement of the pair in the coming days.

In the upper side of the current range, there are two robust zones of resistance. 

In the first zone, between the $109.4 and $109.6 levels, the 23.6% and 38.2% levels of the Fibonacci retracement system in the daily range, multiple short-term moving averages and the 23.6% weekly level of the Fibonacci retracement system stand out.

A second zone is located at the maximum level of the range at $109.7. The indicator shows why the price is having such a hard time moving above this level. This active resistance is the result of the November high, the previous week's high and yesterday's high. In this type of resistance, there are many sell orders, and it is always complicated to pass.

On the bottom side of the price band, the supports show even more solidity. At $109.25 the Fibonacci retracement levels are 23.6% and 38.2% in the monthly range and just below yesterday's low. 

Slightly lower is the S1 level in the daily range in the Pivot Points system.

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.

Learn more about Technical Confluence