Drawing Fibonacci Retracements in Rangebound Markets
Good Afternoon,
We have had two days of above average trading ranges in equities and two days of normal trading ranges in forex. Two days of trends (one down and one up) in equities and two days of sideways consolidation in forex. That is OK though, as moves and counter-moves give us trade setups such as the DOUBLE FALL LINE TRADE. Look at the GBP/USD and even though it was a small range for the day, it had retracement after retracement.
Past performance is not indicative of future results
These overbought/oversold areas are readable if you understand support and resistance and then throw in an indicator such as a Fibonacci Retracement to see the "where are we now compared to where we were" scenarios. Other indicators that help in rangebound (oscillating) markets are MACD's and Relative Strength Indexes.
As always, let's continue to monitor economic events and watch the weekly initial claims that will be released tomorrow morning. Could a bad number get us to trend back down in equities? SPX levels are as follows: support - 1370 and 1350; resistance - 1400 and 1424.
Link to tonight's IBFX "Long Term Trading Opportunities" Webinar: https://www1.gotomeeting.com/register/637661496
Happy Trading and Be Environmentally Cool
Coach Brian
Forex trading is one of the riskiest forms of investment available in the financial markets and suitable for sophisticated individuals and institutions. The possibility exists that you could sustain a substantial loss of funds and therefore you should not invest money that you cannot afford to lose.
