Fibonacci Price Targets
161 % Fibonacci Extension target and 61.80 % Fibonacci Retracement
Butterfly Buy Pattern on 5 min chart.
On the 4 hour chart of the EUR/USD we see that market price found support at the 61.80 % Fibonacci retracement and the daily S1 Pivot. From there, the Euro moved up to the 4-hour 10 Simple Moving Average (SMA) and the daily and weekly Pivot point resistance, where price started to slightly retrace back.
|4-hour Fibonacci Retracement|
The 5 min Euro Chart below shows the development of a Butterfly buy chart pattern, which led to the sharp price reversal visible on the 4-hour chart.
The large black circle shows the butterfly pattern -three wave consolidation-after an impulsive move. The Euro passed the minor/ first butterfly buy target at 127 % Fibonacci Extension of the consolidation pattern and market price moved further to the final 161 % Fibonacci level of the Butterfly buy pattern. From there, the Euro reversed sharply to the upside and market reached the 161 % Fibonacci Extension of the whole swing from the high of the consolidation pattern/ Butterfly pattern to the market low.
In addition, the 161 % Fibonacci Extension level at the market bottom, which usually acts as the buying opportunity in the butterfly buy chart pattern, also coincided with the 100 % Fibonacci Extension level (of the recent swing down prior to the consolidation pattern moved to the high of the consolidation pattern).
Furthermore, the final 161 % Butterfly target coincides with the weekly Pivot point. The daily Pivot point might have acted as further resistance zone.
|5 min Butterfly buy pattern|