FX.co ★ AUD/USD Elliott wave count and Fibonacci levels, October 27, 2010

AUD/USD is moving within corrective wave 4 of weekly degree - colored plum in the chart. This is wave count on larger scale. But on smaller TF's the wave down we are witnessing now may become wave C of the med term downtrend - all within the weekly corrective wave. To confirm wave C break below 0.9662 is needed. Until that the nearest supports will be Fibonacci expansions off 0.9973-0.9880-0.9926, 0.9926-0.9814-0.9867. And further - expansions off 1.0002-0.9662-0.9973, and retracements of 0.8772-1.0002, 0.8066-1.0002.

Supports:

- 0.9686-83 = confluence area of expanded objective point (XOP) and super expanded objective point (SXOP)
- 0.9633 = objective point (OP)
- 0.9574 = SXOP
- 0.9532 = .382 retracement

In case the price reverses up the nearest resistances will be Fibonacci retracements of the wave down from 0.9973 (wave not developed yet).

Overbought/Oversold

The Detrended Oscillator has shown a very deep peak and is now moving back to the zero level. Assuming that the medium term trend is down it's preferable to seek for topping signals to enter short when the price hits a Fibonacci retracement (not available yet) or when the oscillator gets into the overbought - 30-40 pips to go.

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