Definition
Horizontal levels drawn between a high and a low at set percentages, most often 38.2%, 50% and 61.8%, which traders watch as possible places for a pullback to stop.
The story
Say gold rallies from $3,800 to $4,000, a $200 move. The 50% retracement level is $3,900, and the 61.8% level is about $3,876. The percentages come from the Fibonacci number sequence (50% isn't one of them, but traders include it). Why these levels should matter at all is debated; part of the answer is simply that so many traders watch them.
Why you'll see it
Fibonacci levels are built into nearly every charting platform and come up often in technical commentary.
Connects to
We explain why it moves markets. What you do with it is your call. Commentary and education only. Not financial advice. All terms