What Is Fibonacci Retracement and How to Use it Fibonacci retracement is a technical analysis tool used to identify potential levels of support and resistance during a price pullback.

Like any indicator, it shouldn’t be used in isolation, but it can be used as part of a trend-following strategy to find prices to buy at during a pullback [see ETF Technical Trading FAQ].

Fibonacci retracement levels are a strategy that some traders use to analyze a stock’s resistance levels. You can use many different retracement levels but one of the most common is 61.8%.

Learn how to use Fibonacci retracements as part of a forex trading strategy. Fibonacci levels are watched to identify support and resistance levels.