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

The AUD/USD pair is now trading in the flat limited by 0.9708-0.9909. The breakout of the flat will show the direction of the future med term frend. This flat is a good example of a narrowing triangle, therefore we can expect rather a strong breakout of the flat.

According to wave count so far we have all the subwaves lined up for the continuation of the uptrend. Break above 0.9916 is needed to confirm that. The targets of the upmove are Fibonacci expansions off 0.8772-0.9599-0.9462 (daily waves A-B - colored lightgreen), 0.9462-0.9749-0.9541 (royal blue), 0.9541-0.9916-0.9708 (magenta), 0.9708-0.9909-0.9769 (red).

Resistances:

- 0.9893 = contracted objective point (COP)
- 0.9940 = COP
- 0.9970-73 = confluence area of objective point (OP) and COP
- 1.0005 = expanded objective point (XOP)

In case the price reversed down for a larger degree corrective wave the nearest supports will be Fibonacci retracements of 0.9541-0.9916, expansions off 0.9916-0.9708-0.9909, 0.9909-0.9769-0.9891.

Supports:

- 0.9751 = OP
- 0.9701 = OP
- 0.9684 = .618 retracement
- 0.9664 = XOP

Overbought/Oversold

The Detrended Oscillator is moving into the oversold area. Assuming that the prevailing trend is still up, it's preferable to open longs after deep retracements, e.g. to Fibonacci supports or when the price gets into the oversold.

Read more on how to apply Fibonacci studies to calculate price targets.