In technical analysis, Fibonacci retracements provide support and resistance levels on an asset’s price chart. Fibonacci retracements are not just simple high and low points, they conform to the ratios discovered by the 13th century mathematician which they take their name from. When drawing Fibonacci retracements, you can expect to see lines on your chart conforming to the Fibonacci levels of 23.6%, 38.2%, 50%, 61.8% and 100%. When going from low to high, each line represents a possible support level. When going from high to low, each line represents a possible resistance level. As with all technical indicators, these levels can be self-fulfilling, particularly if enough traders on the same market are observing them.
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