Curved lines drawn at Fibonacci distances from a swing point, creating arc-shaped support and resistance zones that account for both price and time.
How Fibonacci Arcs Work
Fibonacci arcs combine price and time into a single tool. After drawing a trendline between a swing high and swing low, semicircular arcs are plotted at the 38.2%, 50%, and 61.8% Fibonacci levels. Unlike horizontal Fibonacci Retracement lines that only measure price, arcs curve outward to reflect the passage of time.
On a EUR/USD daily chart, arcs drawn from a major low to a major high create curved support zones that expand as time passes, adjusting the expected support level based on how quickly price approaches the area.
Using Arcs in Practice
When price touches or approaches an arc, it may reverse or consolidate. The 61.8% arc generally represents the strongest support in an uptrend. If price breaks through all three arcs, the original trend is likely exhausted. Arcs are particularly useful when combined with Fibonacci Fan lines or horizontal retracements for multi-dimensional confluence.
Considerations
Fibonacci arcs are sensitive to chart scaling. Different aspect ratios change the shape of the arcs, so traders should use consistent chart settings. The tool works best on daily and weekly charts where the price-time relationship is more stable. Most charting platforms allow you to adjust the center point and radius for better alignment with actual market behavior.
Related Terms
Fibonacci Fan
A technical analysis tool that draws trendlines from a swing point through Fibonacci retracement levels, creating a fan of diagonal support and resistance lines.
Fibonacci Retracement
A technical analysis tool that uses horizontal lines at key Fibonacci ratios (23.6%, 38.2%, 50%, 61.8%, 78.6%) to identify potential support and resistance levels where price may reverse during a pullback.
Support
A price level where buying interest is strong enough to prevent further decline. The price tends to bounce upward when it reaches support.
Resistance
A price level where selling interest is strong enough to prevent further advance. The price tends to reverse downward when it reaches resistance.
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