Fibonacci Retracement

A technical analysis tool that uses horizontal lines drawn at key Fibonacci ratios -- 23.6%, 38.2%, 50%, 61.8%, and 78.6% -- to identify potential support and resistance levels during a price pullback. Based on the mathematical sequence discovered by Leonardo Fibonacci in the 13th century, these levels appear with surprising frequency in market price action. The 61.8% level, known as the "golden ratio," is the one traders watch most closely.