Fib sequence (horizontal dotted levels) is tuned to the fractals configuration. Fib Channels imitate market tendency to a UP/DOWN trend based on critical levels of fractal's coordinates. Two tools are essential to decode even a basic potential of a pattern. Basically, when formations are coincided to Golden Ratio, it projects the chances of reversal at any given point of a price. To justify such statements above, I'd refer to this graph below: Only this time two coordinates of fib channel (downward) are changed to cover a newer market data.