Fibonacci Retracement
ForexDefinition
Fibonacci retracement is a technical analysis tool that uses horizontal lines to indicate potential support and resistance levels based on Fibonacci ratios (23.6%, 38.2%, 50%, 61.8%, 78.6%). Investors use it to identify possible reversal points after a significant price move.
Example in context
After EUR/USD rallies from 1.0800 to 1.1000, a investor draws Fibonacci retracement levels to find potential areas where the price might pull back and resume the uptrend.
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