The Fibonacci Channel is a technical analysis tool that traders use to identify potential support and resistance levels. The channel is created by drawing two lines, one above the price bars and one below the price bars, which are both parallel to each other and have a common spacing. The most popular way to use Fibonacci channels is to look for peaks and valleys in the market in order to predict major changes in trend directions.Below Diagram of Fibonacci Channel:-When prices reach a peak within the channel, it is often considered an area of resistance; as prices approach this level, they are likely to stall or reverse direction. Conversely, when prices reach a valley within the channel, it is often considered an area of support; as prices approach this level, they are likely to bounce or resume their upward trend. By identifying these key points on charts using Fibonacci channels, traders can make more informed decisions about when and where to enter or exit trades.
