News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Mixed
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bearish
GBP/USD
Mixed
USD/JPY
Bearish
More View more
Real Time News
  • Forex Update: As of 15:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: -0.00% 🇨🇭CHF: -0.11% 🇪🇺EUR: -0.50% 🇨🇦CAD: -0.87% 🇦🇺AUD: -1.05% 🇳🇿NZD: -1.16% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/aZNugjVOT2
  • Indices Update: As of 15:00, these are your best and worst performers based on the London trading schedule: Wall Street: -0.78% US 500: -0.85% FTSE 100: -1.28% France 40: -1.62% Germany 30: -1.77% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/y08VtV4cJy
  • Equities are broadly weaker this morning as Joe Biden hinted at tax cuts while introducing a new stimulus package last night. Get your stock market update from @HathornSabin here: https://t.co/8L3lZeZbbK https://t.co/X0sHgN1IwF
  • Looks like the $EURUSD (the Dollar) is making a go of it. Both the relative appeal of faster growth potential in the US and the spark of risk aversion we have today pitching favor to the Dollar. Terrible day - end of week - for a critical transitional move though https://t.co/Sb5IZE6F0C
  • US Indices are heading lower today after misses on key data prints. DOW -1.19% NDX -1.20% SPX -1.19% RUT -1.74% $DOW $QQQ $SPY $IWM
  • Commodities Update: As of 15:00, these are your best and worst performers based on the London trading schedule: Gold: -0.55% Oil - US Crude: -2.14% Silver: -2.46% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/UlhX3chZWU
  • 🇺🇸 Business Inventories MoM (NOV) Actual: 0.5% Expected: 0.5% Previous: 0.8% https://www.dailyfx.com/economic-calendar#2021-01-15
  • $EURUSD briefly fell below 1.2100 for the first time since December 10th. $EUR $USD https://t.co/yVqkPtN0Cc
  • 🇺🇸 Michigan 5 Year Inflation Expectations Prel (JAN) Actual: 2.7% Previous: 2.5% https://www.dailyfx.com/economic-calendar#2021-01-15
  • 🇺🇸 Michigan Inflation Expectations Prel (JAN) Actual: 3% Previous: 2.5% https://www.dailyfx.com/economic-calendar#2021-01-15
3 Step Fibonacci Rebound Trading

3 Step Fibonacci Rebound Trading

2014-03-14 20:20:00
Gregory McLeod, Currency Analyst

Talking Points:

  • Forex traders use Fibonacci support and resistance levels to buy o the dip
  • The 38.2%, 50%, and 61.8% Fibonacci levels are where price typically rebounds
  • The EURGBP is has recently rebounded from an area of significant Fibonacci support

If you have been trading for any length of time, you have undoubtedly seen the big Forex move that got away. There is a feeling of regret that you missed the move. In addition, there is the fear that price would reverse as soon as you were to get into the trade.

So how can Forex traders time their entries and enter with a degree of confidence? The answer is to use Fibonacci retracements to buy the “rebound.”

Learn Forex: EURGBP Rebound from 61.8% Fibonacci Level

3 Step Fibonacci Rebound Trading

Created by Marketscope 2.0

In the above chart of EURGBP, price surged 1059 pips from the low of 0.7747 on July 21st 2002 to the 0.8813 high on February 23rd 2013. It was an amazing climb especially in late December where EURGBP began to accelerate in four wide ranging green candles.

If you missed this move, don’t worry because Fibonacci retracements can be used to identify key levels of support where price may resume the uptrend. Typical rebound areas are the 38%, 50%, and 61.8% levels.

Three Step Fibonacci Trade Setup

  1. Start the Fibonacci tool at the beginning of the impulse move.
  2. Use the Fibonacci tool to connect the highest point of the move.
  3. Buy after price rebounds from a Fibonacci level.

Additionally, you would place a stop just below the swing low and take profit point at the previous high. Once price moves in your favor, move stop to breakeven at earliest opportunity. Usually, a protective stop can be moved once a new candle has opened up above the entry.

As you can see from the chart, there were a few false starts as EURGBP pulled back to a Fibonacci level rebounded higher for a few hundred pips and then broke back down below that same Fibonacci level. There is a possibility that this current rebound from the 0.8156 61.8% Fibonacci area could also end up pulling back and breaking down to the next Fibonacci level.

The key is to remain flexible and lock in profits along the way ahead of the bigger target. GBP weakness and the current stretch of Euro strength could power EURGBP higher. Whether Fibonacci levels are self-fulfilling prophecies or linked to some other phenomenon, it is important for traders to recognize these levels as potential areas to catch the “second act” of a bull run!

---Written by Gregory McLeod, Trading Instructor

This article showed you how to use Fibonacci to trade EURGBP bounce. I want to invite you to enroll in our free Fibonacci Retracement Courseto further your understanding of Fibonacci. Sign our Guestbook to gain access to this course. You will automatically have universal access to other courses.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES