FX.co ★ AUD/USD Elliott wave count and Fibonacci levels, December 31, 2010

This currency pair has developed 5 subwaves of the medium term uptrend - colored magenta in the chart. The wave down has the potential to become wave A of the A-B-C cycle. But if 1.0197 is broken to the upside we'll get an extension and the targets above the current price will be Fibonacci expansions off 0.9539-1.0031-0.9833, 0.9833-1.0069-0.9990, 0.9990-1.0197-1.0118, 1.0118-1.0175-1.0150.

Resistances:

- 1.0185 = contracted objective point (COP)
- 1.0207 = objective point (OP)
- 1.0226 = OP
- 1.0242-46 = confluence area of expanded objective point (XOP) and COP

If the price reverses down the nearest supports will be Fibonacci retracements of 0.9990-1.0197.

Supports:

- 1.0118 = .382 retracement, hit precisely (!!!)
- 1.0094 = .50 ret
- 1.0069 = .618 ret

Overbought/Oversold

Assuming that the prevailing trend is up it's preferable to use oversold readings of the Detrended Oscillator or its cross below the zero level to consider long positions. The price is now above the zero level, therefore now is not a good moment to open longs. A level to watch lies 20-25 pips below the current price.

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