Tuesday, March 16, 2010

Fib Fan

For the past few months, I have really started to toy around with the fibonacci fan. I am by all means no expert on the use of the tool, but have found it very helpful in identifying support and resistance areas, as well as being invaluable in determining a shifts in trend.

Here's an example from today and yesterday in the EUR/USD. As EUR/USD has been a key leader in trends over the past few months, I have been following very closely.

Notice the bounces off fib support, and thrusts through fib resistance. Late last night that was an early indicator that we may be in a new short term trend. The breakthrough this morning of the last fib line was confirmation.

Another option for fib placement in this case... similar message.

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