FX.co ★ AUD/USD Elliott wave count and Fibonacci levels, August 25, 2010

According to wave count this currency pair is now developing a strong med term downtrend. The targets of the downside movement are Fibonacci retracements of 0.8314-0.9221 and expansions off 0.9221-0.8842-0.8980.

Price targets below the current level:

- 0.8768 = .50 retracement
- 0.8746 = contracted objective point (COP)
- 0.8660 = .618 retracement

In case the price continues the upside corrective wave the nearest resistances will be Fibonacci retracements of 0.8980-0.8798 and expansions off 0.8798-0.8874-0.8811:

- 0.8868 = .382 retracement, reached already
- 0.8887-89 = confluence area of .50 ret and objective point (OP)
- 0.8910 = .618 ret

Overbought/Oversold

The Detrended Oscillator is slightly above the zero moving from the overbought. The nearest overbought area is some 25-35 pips above the current price. Assuming that the major trend is down, it's better to seek for topping signals when the price reaches one of the Fibonacci resistances listed above or the overbought area. And then enter short.