Area of high Confluence
This is the four-hour US 100 chart. It shows the recent decline in the pair from over 12 187 to below 11 528.
a closer look reveals a bearish trend.
Moreover, we set the psychological level (the round number between 12 187 and 11 528, meaning the 11 528 level) and set an area where the price hesitated on its move lower.
Because the Forex market is extremely volatile, we talk about support areas and specific levels. Hence, it is not the 11 528 level, but the area that keeps attracting price.
We see that on its way lower the US100 met support every time it dipped below the 11 528. However, the bounces were shallow, and the highs that followed formed a series of lower highs. That’s typical for a bearish trend.
In other words, confluence areas like these are difficult to break on a first attempt. Either time passes, and price won’t find resistance as the confluence area remains on the left side of the chart, or the bearish channel will keep driving the price action.
Nevertheless, support is meant to be broken, and resistance likewise.
The more the price tries, the bigger the chances that eventually will overcome any confluence areas, no matter how many elements will form it.
a closer look reveals a bearish trend.
Moreover, we set the psychological level (the round number between 12 187 and 11 528, meaning the 11 528 level) and set an area where the price hesitated on its move lower.
Because the Forex market is extremely volatile, we talk about support areas and specific levels. Hence, it is not the 11 528 level, but the area that keeps attracting price.
We see that on its way lower the US100 met support every time it dipped below the 11 528. However, the bounces were shallow, and the highs that followed formed a series of lower highs. That’s typical for a bearish trend.
In other words, confluence areas like these are difficult to break on a first attempt. Either time passes, and price won’t find resistance as the confluence area remains on the left side of the chart, or the bearish channel will keep driving the price action.
Nevertheless, support is meant to be broken, and resistance likewise.
The more the price tries, the bigger the chances that eventually will overcome any confluence areas, no matter how many elements will form it.
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