FX.co ★ AUD/USD Elliott wave count and Fibonacci levels, October 14, 2010

The AUD/USD pair has broken out of the flat to the upside, confirming the uptrend. According to wave count the pair is developing wave C of the daily uptrend - colored light green in the chart. Within this daily wave there's a set of A-B-C subwaves - colored royal blue. The latter is also subdivided into smaller waves, impulsive as well.

The targets of the upmove are Fibonacci expansions off 0.8772-0.9599-0.9462 (daily waves), 0.9462-0.9749-0.9541 (subwaves - royal blue), 0.9541-0.9916-0.9708, 0.9708-0.9909-0.9769, 0.9769-0.9907-0.9861, 0.9861-0.9939-0.9894.

Resistances:

- 0.9999-1.0005 = confluence area of expanded objective point (XOP) and objective point (OP)
- 1.0020 = XOP
- 1.0083-84 = confluence area of OP and XOP

In case the price reverses down for a corrective wave the nearest supports will be Fibonacci retracements of the wave up starting from 0.9861 (wave not developed yet).

Overbought/Oversold

The Detrended Oscillator is moving back to the zero line, confirming the corrective wave. Assuming that the prevailing trend is up, it's preferable to seek for bottoming signals to enter long, or when the oscillator gets into the oversold - 20 pips to go.

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