This EUR/NZD 4-hour chart shows how Fibonacci retracement levels can be an effective tool for trend traders. The market spiked up above the 61.8% level but then quickly reversed and is now trading back below the 38.2% level. This is obviously bearish for this pair and we should look for more selling pressure. Some aggressive traders may already be in their sell position on this pair and I would think that many have their protective stop above the high of that candle that quickly spike up through the 61.8% level.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.