Fibonacci levels can also be used in making diagonal support and resistance level as well as horizontal. The diagonal levels of support and resistance are also known as Fibonacci fans. It is based on three Fibonacci retracement levels: 61.8 %, 50 % and 38.2 %. To construct a Fibonacci fan, follow the instructions below:
Find a trend
Find the 3 horizontal Fibonacci levels (61.8 %, 50 % and 38.2 %) as they relate to that trend
Draw a vertical line that crosses through these levels at the point where the trend ended
Draw 3 lines, each one beginning where the trend began and crossing through a separate point where the vertical line intersects one of the Fibonacci levels. With Fibonacci fans drawn, you can project possible support and resistance levels that you can use in your forex trading. Look at the Fibonacci fan on the daily GBP/USD chart below. The illustrated levels were calculated based on the trend highlighted by the red arrow. You can use the rays from the fan to help you determine when to enter and exit your trades as the currency pair began to turn around and move lower.
Notice how the value of the currency pair went through the middle ray of the Fibonacci fan for a while in early August, and then it went through that bottom ray of the fan for a few days. It is also remarkable that the levels created by the Fibonacci fan continue to be a factor far into the future. You can see how the GBP/USD went down after hitting the bottom ray of the fan four months later in November.