Fibonacci Retracement - Fibonacci Retracements are displayed by selecting two extreme points on a forex chart, for example, a trough and opposing peak. A series of seven horizontal lines are drawn intersecting the trend line at the Fibonacci levels of 23.6%, 38.2%, 50%, 61.8%, 78.6%, 138.2%, 161.8%.

 

Retracement Levels B:   23.6% 38.2% 50.0% 61.8% 78.6% A: 138.2% 161.8%

After a currency moves significantly in price in this case up, it will often retrace a portion (if not all) of the original move. As prices retrace, support and resistance levels often occur at or near the Fibonacci Retracement levels.