Monday, 11 April 2011

As it is my first post I will get a little bit more in to details, the whole concept is relatively simple although it does require practice. In order to determine future resistance I have used a Fibonacci retracement tool. For our purpose of forecasting future resistance levels we will not draw it from low to high or high to low, which is the standard way to use it and instead we will draw Fibonacci retracements from low and place the 61.8% level on the next resistance level. Fibonacci have been drawn from low of 1.3427 and the 61.8 have been placed at the resistance level of 1.3816(blue line). On the break of 23.6% we have adjusted our tool to better reflect current price action and such as we have placed the 23.8% level at 1.4235(red line) which raised 61.8% level by 15 pips.  After these adjustments we see that all the Fibonacci levels are respected by the price action suggesting that the 0% level will also be a major resistance level. The price should retrace back to 23.6% level which is 1.4235. If the price will be able to sustain above this level and then break 0% level there will be potential for further rise.

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