Fibonacci

Fibonacci analysis is a technical analysis method based on numerical ratios derived from the Fibonacci sequence, most commonly 23.6%, 38.2%, 50%, and 61.8%. In trading, these ratios are used to identify potential support and resistance levels following a significant price move. In energy markets, Fibonacci tools are frequently applied to volatile instruments such as crude oil, natural gas, and power futures, where sharp directional moves are common. Traders typically draw Fibonacci retracements between recent highs and lows to assess where corrective moves may pause or reverse. Although Fibonacci analysis is not grounded in physical supply and demand fundamentals, it can influence price behaviour because many market participants monitor the same levels. This self-reinforcing aspect can make Fibonacci levels relevant in short-term trading and execution. Energy traders often use Fibonacci analysis alongside trend indicators, volume analysis, and fundamental catalysts such as inventory data or geopolitical events. While Fibonacci should not be relied upon in isolation, it can be a useful tool for timing entries, exits, and risk placement in fast-moving energy markets where precise execution matters.