Fibonacci Trading levels

Fibonacci extensions and Fibonacci

Fibonacci retracement

EURO US Dollar

found resistance at the 100 % Fibonacci extension (1.2603) (4) and bounced back to today's daily pivot point (1.2552) and the 61.80 % Fibonacci  retracement (6). From there, the Euro US Dollar formed a larger consolidation around the weekly pivot at 1.2564 on the hourly chart. During this consolidation the Euro Dollar did not confirm a break below the weekly pivot point on the hourly chart after yesterday's confirmed upward penetration of this level (4 p.m-yesterday) .

The recent consolidation pattern at yesterday's high (5) and the low of August 2010 (orange line/ weekly chart-last chart) seem to have capped the market to the upside recently (8). Since the break below orange line on Monday the Euro struggled to confirm an upward break through this level again on the hourly chart. However, the 4 p.m. hourly candle confirmed the upward break of the orange line on the hourly chart after market paused at the 61.80 % Fibonacci extension (3-4 at 7). But in general, the price action on the daily chart might be more important in analysing the price behaviour around weekly support/ resistance.

1 hour Fibonacci trading

On the 5 min chart (below) we see that the Euro retested the daily pivot point at about 10 a.m. GMT but market could hold at support. The initial breakout candle at 9:55 a.m.did not get confirmed on the 5 min chart.

The Euro consolidated around the daily pivot point (B) and moved up again (no confirmed break of the daily pivot point). The daily pivot and the recent consolidation (B) at this price level held the market again at 1:10 p.m (C) and the Euro moved up again. At 2:40 p.m. the Euro bounced strongly back from the weekly pivot point and the 61.80 % Fibonacci  retracement (D) after the Euro formed a higher low (1:10 p.m.) and higher high (1:55 p.m.) on the 5 min chart.

The Euro consolidated at the 61.80 %Fibonacci extension before market resumed its uptrend and breached the recent high (blue line-stop clearing target) but the Euro found resistance at the 61.80 % Fibonacci extension on the 5 min chart (G) (first breakout often false one) and market price closed below the blue line (recent high) on the hourly (4 p.m.). The Euro found some temporarily support at the price level of the prior consolidation (H) and market formed a bear flag before market went lower (not shown).

5 min  61.80 %  Fibonacci level

Weekly Chart Analysis

Fib extensions and retracements

Fibonacci Trading

 Fibonacci retracement and extension levels

1 hour  Fibonacci Trading

Today in the beginning of the European session the Euro moved up to the 100 % fib extension (1-2 at 3) and daily R1 at 1.2548. The Euro struggled with this resistance level although EUR/USD moved up close to the weekly pivot point (1:35 p.m. GMT, 4). However, EUR/USD failed to close above this resistance zone (1.2548) on the hourly basis so that market moved lower (1:35 p.m.) to find some support at the rising hourly 10 SMA (red line-5). From there, the Euro strongly moved up above the prior resistance zone at 1.2548 (second test) and market was able to close above the weekly pivot on the hourly (second test) and 4-hourly basis (candle close at 4 p.m.). The hourly candle (3-4 p.m.) approximately closed at (respected) the 61.80 % retracement and daily R2, which in the following got broken with the beginning of the next hourly candle (4-5 p.m.) and the Euro moved up to the 100 % fib extension at 1.2603 (6).

5 min Butterfly sell pattern

Fibonacci Retracement at 61.80 %

On the 5 min chart we see that the Euro very often reacted at the 61.80 % fib retracement marked with the 0 on the 5 min chart and also at the 100 % fib extension market with the 1 on the 5 min chart (important Fibonacci levels). At the beginning of the London trading session at 9 a.m. the Euro made a abc retracement before market moved up to the 100 % fib extension at 1.2554. In the following market formed a typical 3-wave consolidation pattern/ butterfly (circled). After the termination of the consolidation the Euro reached the typical butterfly target (127 % fib extension-1-0 at 0) before EUR/USD reversed and took out the low of the prior consolidation (1.2526), which is also typical for a butterfly pattern. The Euro found support at the 10 SMA on the hourly Chart (2-3 p.m.) and formed a kind of ending diagonal on the 5 min chart (ED). In the following, the Euro strongly moved up to the 100 % fib extension, where market consolidated.