Page 14 - Module 11 The Fibonacci science

Module 11 – The Fibonacci Science

The above chart is an example of the support trend line and Fibonacci retracement during an
uptrend. In this chart the pair is trending up nicely with a series of higher and regular bottoms that
line up to make a great trend line.

The red horizontal lines are the Fibonacci retracement levels constructed using the most recent price
rally for the swing low and swing high points. Right away it is obvious that the 61.8% level lined up
with the trend line to come up as combined support. See how the retracement stopped at the
junction of the 61.8% Fib level and the trend line. This was a good place to buy! The subsequent price
action just leaves nothing more to be said.

During a downtrend you need to look for a resistance trend line.

In case there is a breakout of the combined support or resistance then you need to turn your focus
towards the next Fibonacci level. Let's also have a look on another Forex chart where there was a
breakout from the combined support of the trend line and Fibonacci retracement level and the prices
hit the next Fibonacci level:

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