FX.co ★ AUD/USD Elliott wave count and Fibonacci levels, July 22, 2010

According to wave count this currency pair is now developing potential wave C of the intermediate downtrend (colored magenta on the chart). The latter in its turn is regarded a corrective wave to 0.8314-0.8870 movement (colored royal blue on the chart). The targets of the downside movement are Fibonacci retracement points of 0.8314-0.8870 and expansions off 0.8870-0.8633-0.8858 and 0.8858-0.8798-0.8842.

Price targets below the current level:

- 0.8712 = contracted objective point (COP)
- 0.8685 = super expanded objective point (SXOP)
- 0.8621 = objective point (OP)
- 0.8592 = .50 retracement
- and so on, see the image

In case the price reverses to the upside the strategic targets are Fibonacci expansions off 0.8314-0.8870-0.8633. Minor targets are Fib retracements of 0.8858-0.8732.

Price targets above the current level:

- 0.8798 = .50 ret
- 0.8812 = .618 ret
- 0.8977 = COP (a strategic target)

Overbought/Oversold

The Detrended Oscillator is moving into the overbought area possibly indicating a med term reversal, since the previous indicator peak may be exceeded. If you follow short term intraday strategies, the nearest Fib resistances may be good levels to enter short in case of topping signals. For a med term trader it's better to wait for a retracement down to a significant Fib support to search for bottoming signals.