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
Bearish
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
Bullish
GBP/USD
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
USD/JPY
Bearish
More View more
Real Time News
  • The Hang Seng Index #HSI appears to face an immediate resistance at 29,870 (127.2% Fibonacci extension). Prices surged more than 3% before pulling back slightly in the afternoon trading session. Stock connections registered over HK$ 20 billion net southbound flow today. https://t.co/3J5JNIVopi
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 100.00%, while traders in Germany 30 are at opposite extremes with 67.52%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/4BsBWBZvaI
  • Oil - US Crude IG Client Sentiment: Our data shows traders are now net-long Oil - US Crude for the first time since Jan 05, 2021 when Oil - US Crude traded near 5,008.80. A contrarian view of crowd sentiment points to Oil - US Crude weakness. https://www.dailyfx.com/sentiment https://t.co/8PE3J3958F
  • Forex Update: As of 05:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 0.43% 🇳🇿NZD: 0.34% 🇨🇦CAD: 0.27% 🇪🇺EUR: 0.15% 🇨🇭CHF: -0.01% 🇯🇵JPY: -0.30% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/CCqUPxXb1g
  • Get your snapshot update of the of relative currency strength and exchange status from around the globe here: https://t.co/H19vRDCpUJ https://t.co/ruKhwAC2Sf
  • Indices Update: As of 05:00, these are your best and worst performers based on the London trading schedule: Germany 30: 0.74% France 40: 0.60% FTSE 100: 0.56% US 500: 0.39% Wall Street: 0.28% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/NDCTrOVL5r
  • Commodities Update: As of 03:00, these are your best and worst performers based on the London trading schedule: Silver: 1.02% Oil - US Crude: 0.42% Gold: 0.06% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/N0Fo4mM16G
  • Forex Update: As of 03:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 0.37% 🇳🇿NZD: 0.34% 🇨🇦CAD: 0.22% 🇬🇧GBP: 0.14% 🇨🇭CHF: 0.01% 🇯🇵JPY: -0.33% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/IBkW89Ji1M
  • Japanese Chief Cabinet Secretary Kato: Vaccination supply for population to be secured by 1H of this year - BBG
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 100.00%, while traders in Germany 30 are at opposite extremes with 66.75%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/KdbuJBLZMr
How to Combine Fibonacci and RSI for Trading Ideas

How to Combine Fibonacci and RSI for Trading Ideas

Jeremy Wagner, CEWA-M, Head of Education

Talking Points:

  • Use Fibonacci to identify levels of support and resistance
  • Use the Relative Strength Index (RSI) to confirm when a turn may be taking place
  • Enter the trade with at least a 1:2 risk-to-reward ratio

Fibonacci retracement ratios have been used by traders for many years. The ratios can identify hidden levels of support and resistance as it identifies areas where a partial retracement may reverse. For those unfamiliar with Fibonacci, the common retracement ratios are 38.2%, 50%, 61.8%.

As traders are learning about the Fibonacci ratios for the first time, the next logical question the students ask is “how do I know which ratio to focus on?”

It is a good question and the market’s price action will provide a clue if a particular Fibonacci retracement ratio is likely to be respected creating a market turn.

Said another way, rather than blindly entering into a trade because it hit a particular retracement ratio, how about if we let the market provide us confirmation signals that it is likely to turn?

We can use the Relative Strength Index (RSI) to help us confirm if a Fibonacci ratio is repelling prices.

(If you would like to learn more about the RSI and how to apply it to your charts, register for this free 20 minute course. In it, you will learn how to read and filter signals provided by the RSI. Register here to start your learning.)

Learn Forex: RSI Confirmation of a Fibonacci Retracement Level

How to Combine Fibonacci and RSI for Trading Ideas

(Created using FXCM’s Marketscope 2.0 charts)

As we can see above, the USD/JPY has the three Fibonacci retracement levels added to the chart (horizontal blue lines). The first level, the 38.2% level, barely resisted prices.

However, we can now see that the 50% level is providing some resistance. Additionally, the RSI is showing divergence which is a bearish signal as well.

Divergence is where the price makes higher highs, but the oscillator makes lower highs. Divergence means that momentum is slowing. Slowing momentum into a resistance level is a good recipe for a trading opportunity.

When prices fell below the black support trend line, which is further confirmation that the temporary uptrend is losing momentum. A trader would enter on a break of the black trend line, then place the stop loss just above the recent swing high.

Look to take profits at a distance at least twice the size of the distance to your stop loss. This will give you a 1:2 risk to reward ratio.

Let the trade evolve until it reaches your stop loss or take profit level.

Risk a small portion of your account balance, less than 5%, on all open trades.

(To learn more about risk-to-reward ratios, money management, and timing trades, we recommend you check out our three forex courses to help you trade like a professional.)

Good luck and happy trading!

---Written by Jeremy Wagner, Head Trading Instructor, DailyFX

Add me to your Google + Forex Circle.

Follow me on Twitter at @JWagnerFXTrader .

To be added to Jeremy’s e-mail distribution list, click HERE and select SUBSCRIBE then enter in your email information.

See Jeremy’s recent articles at his DailyFX Forex Educators Bio Page.

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

DISCLOSURES