Fibonacci Arcs are created by first drawing a trendline between two extreme points, i.e. trough and peak. Three arcs are generated at "Fibonacci Intervals" usually defined as 38.2%, 50% and 61.8% of the distance between a price maximum and minimum. They are centered on the second extreme point and intersect the trendline.
The interpretation of Fibonacci Arcs involves anticipating support and resistance as prices approach the arcs.
What are now known as "Fibonacci numbers" are said to be based upon observations of the Great Pyramid of Gizeh in Egypt by Italian mathematician Leonardo Fibonacci born around 1170 AD.