FX.co ★ AUD/USD Elliott wave count and Fibonacci levels, November 17, 2010

AUD/USD has confirmed wave 5 by breaking below 0.9815 - top of wave 3. Now we calculate the targets of the medium term downtrend (waves 1 to 5 are colored magenta) using Fibonacci expansions off 1.0182-0.9974-1.0091 (waves 1-2), 1.0091-0.9815-0.9922 (waves 3-4) and 0.9922-0.9820-0.9895 (subwaves within wave 5).

Supports:

- 0.9730 = expanded objective point (XOP), reached already (!)
- 0.9646 = objective point (OP)
- 0.9628 = super expanded objective point (SXOP)
- 0.9546 = SXOP
- 0.9475 = expanded objective point (XOP)

If the price reverses up for a corrective wave its targets (resistances) will be Fibonacci retracements of 0.9922-0.9727.

Resistances:

- 0.9801 = .382 retracement
- 0.9825 = .50 ret
- 0.9848 = .618 ret

Overbought/Oversold

The Detrended Oscillator has firmly established itself below the zero level, confirming strength of the downtrend. Assuming that the trend is still down it's preferable to use the oscillator signals to go short when it gets above the zero level or into the overbought (15-25 pips to go). To fine tune the trade one can also use a Fibonacci resistance - see above.

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