FX.co ★ AUD/USD Elliott wave count and Fibonacci levels, December 16, 2010

AUD/USD is moving within medium term downtrend, in wave C - colored orange red in the chart. At this moment wave C has A and B subwaves - colored yellow - with subwave B still developing.

The targets of the corrective downmove are Fibonacci retracements of 0.9539-1.0031, and expansions off 1.0031-0.9893-0.9960.

Supports:

- 0.9843 = .382 retracement, hit precisely (!)
- 0.9822 = objective point (OP)
- 0.9785 = .50 ret
- 0.9737 = expanded objective point (XOP)
- 0.9727 = .618 ret

If the price reverses up the nearest resistances will be Fibonacci retracements of 1.0031-0.9843.

Resistances:

- 0.9915 = .382 ret
- 0.9937 = .50 ret
- 0.9959 = .618 ret

Overbought/Oversold

Assuming that the medium term trend is down it's preferable to use overbought readings of the Detrended Oscillator in conjunction with Fib resistances (see above). The overbought area is still 20-30 pips away, but .382 resistance is a bit farther so be ready to go short at 0.9900-0.9915.

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