FX.co ★ AUD/USD Elliott wave count and Fibonacci levels, December 15, 2010

AUD/USD has finished wave 0.9755-1.0031 (wave C of the medium term uptrend), however the downwave from 1.0031 has exceeded the limits of wave 4 (50% of wave 3), therefore the wave up from 0.9539 to 1.0031 is also over. And now the donwside targets are Fibonacci retracements of 0.9539-1.0031, 0.9755-1.0031, 0.9834-1.0031, and expansions off 1.0031-0.9934-0.9967.

Supports:

- 0.9909-07 = confluence area of .618 retracement and contracted objective point (COP)
- 0.9893 = .50 ret
- 0.9870 = objective point (OP)
- 0.9860 = .618 ret
- 0.9843 = .382 ret
- etc., see the chart

If the price reverses up the nearest resistances will be retracements of the downwave from 1.0031 - this wave is not developed yet.

Overbought/Oversold

Assuming that the pair is now developing medium term downtrend it's preferable to use overbought readings of the Detrended Oscillator in conjunction with Fib resistances (not available yet, therefore use only the oscillator). The overbought area is still 40-50 pips away, so stand aside until it is reached, now the market is a bit too stretched down to open a short position.

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