Fibonacci retracement levels in Forex

Fibonacci retracement levels are a popular tool used in forex trading to identify potential support and resistance levels based on the Fibonacci sequence. The main levels used are 23.6%, 38.2%, 50%, 61.8%, and 78.6%. These levels are drawn on a chart from a swing high to a swing low during an uptrend or from a swing low to a swing high during a downtrend. Traders believe that these levels represent areas where the price is likely to reverse or consolidate before continuing in the direction of the trend. Fibonacci retracements can help traders determine optimal entry and exit points, as well as provide insight into potential price reversals in the forex market.