"INDICATOR OF THE DAY" - DIVERSIFIED TECHNICAL CONFLUENCE
STERLING/SWISS DAILY
Sometimes, the best indicator is not one indicator, but many indicators that all converge at the same level. This is known as a technical confluence, which often acts as an extremely powerful trading tool. A convergence of several indicators at the same price point suggests that the market will have a hard time finding its way through the level, often resulting in some form of a reversal back into the overriding trend. In the above example we can see that the cross rate is now approaching such a confluence just below 1.6400, with a rising multi-day trend-line, 50-Day SMA, 61.8% fib, lower Bollinger and projected daily ATR low all coming in between 1.6350-1.6400. We particularly like this form of a diversified confluence, with many different types of indicators coming in at the same level, which translates into potential buy interest from traders with varying approaches to technical analysis. Trend-line followers will be attracted to the level, while moving average supporters, Fibonacci proponents and Bollinger fans will be as well. As such, we often recommend taking advantage of such confluences when given the opportunity. Please refer to "Trade of the Day" for more color.
Written by Joel Kruger, Technical Currency Analyst for DailyFX.com
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Joel Kruger publishes 6 daily pieces:
“Tech Talk” – A Daily Video Highlighting Technical Developments in the Overnight Session of Trade.
Monday-Friday (between 5:30am-6:30am EST)
“Morning Slices” – Morning Overview using Fundamental, Technical, Flow, and Quantitative Analysis (Includes “Trade of the Day”).
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“Indicator of the Day” – A Feature Report that Highlights our Most Significant Technical Indicator of the Day.
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“Cross Country” – A Midday Fundamental Update, along with Technical Analysis of Selected Cross Rates.
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“Scandi Daily” – A Specialized Daily Fundamental and Technical Overview of the Nordic Currencies. (This report is only distributed through email. Please contact [email protected] if you would like to be added to distribution.)
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“Daily Classical” – A Daily Technical Overview of the Major Currencies.
Monday-Friday (published between 2:00pm-3:00pm EST)
