How to Use Fibonacci Callback Together with Trend Line?

Trend line analysis is another good tool to be combined with the Fibonacci callback. After all, in the trend market, Fibonacci callback boasts the best performance, so this makes sense.

Remember that when a currency pair is in a down or up trend, traders can use Fibonacci callback as a way to enter the trend.So why not look for a level that matches the trend?

Following is the AUD/JPY chart in an hour. As you can see, the price has a short-term upward trend line in the past few days.

one- hour AUD/JPY chart

Seeing this, you may say to yourself, "Well, this is a great uptrend. I would like to buy AUD / JPY, even if it is only a short-term transaction, and I will buy it once the price returns near the trend line.”

Before you do that, why not take out your foreign exchange toolbox and use Fibonacci callback? Let’s see if we can get a more accurate entry price.

Here we plot the Fibonacci callback level with one volatility spot low at 82.61 and the other high at 83.84. Pay attention to how the 50.0% and 61.8% Fibonacci levels intersect the uptrend line. Are these levels able to be used as potential supports levels? There is only one way to figure out.

Guess what? Prior to the price rebound, 61.8% of Fibonacci callback remains the same place, and you will have a perfect entry point if you set some commands at that level.

A few hours after hitting the trend line, prices will soar, surging volatile highs like Astro Boy.

Aren’t you glad to have this tool in your toolbox?

As you can see, it is worthwhile to use the Fibonacci callback, even if you plan to retest the trend line.

The combination of diagonals and horizontal support or resistance levels may mean that other traders are also paying attention to these levels.

However, you should note that drawing trend lines can be very subjective, just like other drawing tools.

You don’t know how other traders draw them, but there is one thing for sure--this is a trend!

If seeing a developing trend, you should look for several ways to go long so as to get a better chance to make a profitable trade. You can use Fibonacci callback to help you find potential entry points.