Fibonacci Channel
The Fibonacci Channel drawing estimates potential support and resistance levels using Fibonacci ratios. Unlike the horizontal lines of a Fibonacci retracement, Fibonacci Channel lines run diagonally.
The drawing consists of a base trendline (zero-line) and multiple parallel lines at key Fibonacci levels, such as 100% and 161.8%. These levels help assess possible price targets during uptrends and downtrends.
In an uptrend, the zero-line acts as a trendline. If the price breaks below it, the trend may be weakening or reversing. In a downtrend, the zero-line helps confirm the downward move. If the price rises above it, the trend may be shifting.