Consolidation pattern, Fibonacci and SMA
S/R Confluence levels/ Zones
Support/ Resistance Confluence zones
|5 min Support/ Resistance Confluence zones|
|1 min S/R Confluence levels|
In the US trading session we had a strong Confluence resistance zone on the 5 min EUR/USD chart at about 1.2965 due to 61.80 % fib retracement of prior swing down, 61.80 % fib extension, 200 MA as well as the prior price zone of the consolidation pattern from the day before.
The Understanding of Consolidation pattern is important as these price zones often act as support/ resistance when market approaches these price levels again for the first time.
A further resistance level was the 20 MA on the 1h chart (not shown).
On the 1 min chart we got further confirmation due to the ending diagonal pattern of wave C (up move lost strength as it approached the resistance area + 61.80 % fib extension.)
In general the first step is to find strong Confluence resistance/ support zones and the second to observe price behaviour at these S/R Confluence levels for confirmation.
Fibonacci Confluenc S/R zones
|5 min Support Resistance S/R Confluence Analysis|
At the open of the US trading session, market bounced from the 1.2920 S/R Confluence support level due to the 61.80 % fib retracement + 100 % fib extension and prior consolidation at the same confluence level.
Furthermore, the 61.80 % fib retracement of the recent swing up didn't break substantially because there was no lower close of the succeeding candles below the range of the red breakout candle (no confirmation).