FX.co ★ AUD/USD Elliott wave count and Fibonacci levels, August 13, 2010

Wave count on daily chart shows that this currency pair is now moving within corrective wave 4 (colored light green). The targets of this wave are Fibonacci retracements of 0.8314-0.9221, and expansions off 0.9221-0.9058-0.9162:

- 0.8898 = expanded objective point (XOP)
- 0.8875 = .382 retracement

Logically, the midterm trend is down. There's a set of 3 waves (colored red), and wave 4 is now developing. The targets of this wave are Fibonacci retracements of 0.9162-0.8915, 0.9221-0.8915:

- 0.9009 = .382 retracement
- 0.9032-39 = confluence area of .382 and .50
- 0.9068 = confluence area of .50 and .618

If the price breaks 0.9039 (.50 of wave 3), then the wave 0.9221-0.8915 will be over.

Overbought/Oversold

The Detrended Oscillator is clearly overbought. Assuming that the midterm trend is down, one may look for shorts in case of topping signals right now, but this may be dangerous since the major trend is still up. Therfore alternative - wait for a pull-back some 30-50 pips below and then a bottoming signal to enter long.