How to use Fibonacci Retracement with Japanese Candlesticks?1 min read
We get full-scale candlesticks when we combine Fibonacci retracement tool with candlestick patterns. Once you will be able to guess the time buying and selling are worn out, it will help you to understand when the price will be continually trending.
Let us explain it with a 1-hour EUR/USD chart.
The pair is in a downtrend since the last week and the move has halted. With the help of the Fibonacci retracement get can show up on this downtrend.
In the chart, the Swing High is set at 1.3364 on March 3 and the Swing Low at 1.2523 on March 6.
On March 9, the EUR/USD has heightened from its closing price. The 50.0% Fibonacci level when was gripped for some time, buyers took the pair higher. Wait and look for if the 61.8% Fibonacci level holds or not. As the last candle was quite bullish, the price may keep blooming.
On the 61.8% Fibonacci retracement level, a long legged doji is formed. You can make some good profit if you have beaten the doji right after it was formed. Also, the price was obstructed before heading straight down.
The red candles indicate that the buyers somehow allowed taking over. Now the price returned to the Swing Low, a move of about 500 pips.
Fibonacci sticks help to signal if a Fibonacci retracement level will hold or not.