FX.co ★ AUD/USD Elliott wave count and Fibonacci levels, November 11, 2010

AUD/USD is moving within corrective wave B of the medium term uptrend (colored magenta in the chart). Wave A 0.9651-1.0182 gives its retracements that are the targets of this wave B. More targets below are Fibonacci expansions off minor waves 1.0182-1.0073-1.0173, 1.0173-0.9974-1.0091.

Supports:

- 0.9979-68 = confluence area of .382 retracement and contracted objective point (COP)
- 0.9916 = .50 ret
- 0.9892-88 = confluence area of objective point (OP) and super expanded objective point (SXOP)
- 0.9854 = .618 ret

In case the price reverses up to correct the medium term downtrend the nearest resistances will be Fibonacci retracements of 1.0173-0.9974.

Resistances:

- 1.0074 = .50 ret, reached already (!)
- 1.0097 = .618 ret

Overbought/Oversold

Assuming that the prevailing trens is down it's preferable to open shorts when the price hits a Fibonacci resistance (see above). The entry can be fine tuned using the Detrended oscillator when it's in the overbought or a bit above the zero level. The overbought is 20-30 pips above the current price wthich corresponds to .50 retracement (1.0074).

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