Fibonacci GONE WILD

A look back at the CAD/JPY...

Notice how the failure of price to re-enter the pitchfork was the ultimate trigger for a final push to the downside.

A pitchfork would also have been useful for the downward move (it still is useful based on the last few candles).

I just wanted to show what the chart would look like with fib drawings.

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Uh-oh......price is outside the pitchfork....will have to see if there is an attempt to re-enter (if it does then look for signs of it supporting price) which means price will now have to make it above the 50% fib line which has served recently as strong resistance...although price broke through it on a few occasions, it has not been able to stay above it...price had a chance to bounce at a fib /pitchfork line intersection but failed to do so...that causes me to have a bias to the downside...a strong break of 1.4700 and the 61% fib line should confirm it...

Price was rejected by the pitchfork on this 2hr chart but it does have great support at 1.4700.

Price never did make a significant break of the 261 ext on the daily. We shall soon see whether or not the 138% ext and pitchfork intersection will serve as support.

Note: I adjusted the drawing point for the median line on the 4hr chart by using the low on the right instead of the left.

DANGER WILL ROBINSON!!! Last week's candle was the first to close below the median line in weeks. Can price make it back in and remain? I want to say that this pair is about to drop like a hot brick but it's a little too early to say for sure, but last week's candle close raises a red flag. As you can see, this line has supported price on several occasions. Keep your eyes open!!

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I'm using a new set of fibs on the 4HR chart as opposed to the ones used previously on the same chart.

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Get ready for something!!!

very nice southern.... have been trying to figure out a way to use pfs and now u have opened my eyes very very nice fib plus fork...how would you trade this then? trade the fork till it is broken?

here is an example...pfs sometimes fool you but inhindsight they are always very nice...so in real time... i always see 2 pitchforks???? is it the daily fibs that matter? thanks in advance

see chart BIG down fork and yet a mini up fork ????

Trading off this chart alone, I would short it (with a stop loss around 214.90) until it hits the median line. However, price might take a ride to the upside first. A couple of cadle closes outside of the pitchfork would make me want to close the trade. If that happens, I would look for a bounce off the outside pitchfork line for an indication of price wanting to move sideways or up.

214.90 eh? interesting! lol can you post an example of gu for me? in real time? i am trying to understand your trading entry and exit strategy friend so I may learn something of value.... thanks in advance for you efforts

Well, price is now trading outside the pitchfork and making higher highs so it throws a monkey wrench in the short trade. It might still go down, but this break makes it less certain. If price does make a run to the downside, a good take profit would be when it reaches the outside pitchfork line (which could turn out to be a spot to take a long trade).

I've added a couple of descending trendlines which show where price might run into resistance, especially with the top one since it is in the neighborhood of the 50% fib line so it makes a great resistance combination.

Remember, this is just trading off this chart alone.

In hindsight, that stop should have been a bit more conservative (lol). Maybe around 214.75. Plus, the bounce off the median line proved to be an indication of a further rise in price (with price breaking outside the pitchfork giving additional confirmation).

Anyway, here is an hourly chart of GBP/USD with a closeup.

The Pound is facing a serious dilema. It's in a fly or die state right now as shown by this daily chart (consider this a gift to you forexers out there because Santa is in the process of going into hibernation).

I believe we are going to see a 100 pip move (or close to it) in this pair before the week is over. Below are two daily charts. The first is a shorter term and the second is a longer term (the one that kicked it all off).

Note: The pitchforks are not the same in both charts.