FX.co ★ AUD/USD Elliott wave count and Fibonacci levels - January 27, 2011

The AUD/USD is developing corrective subwave B (colored orange red in the chart) within potential wave C of medium term uptrend - colored red in the chart. To confirm wave C break above 1.0021 is needed. At this moment the targets above the current price level are Fibonacci retracements of 1.0255-0.9803, and expansions off 0.9803-1.0076-0.9831, 0.9831-1.0021-0.9888.

Resistances:

- 1.0005 = contracted objective point (COP)
- 1.0078-82 = confluence area of objective point (OP) and .618 retracement
- 1.0104 = OP

If the price reverses down the nearest supports will be Fibonacci retracements of 0.9888-1.0000, and expansions off 1.0255-0.9803-1.0076, 1.0076-0.9831-1.0021, and 1.0021-0.9888-1.0000.

Supports:

- 0.9931 = .618 retracement
- 0.9918 = COP
- 0.9870-67 = confluence area of COP and OP
- 0.9797 = COP
- 0.9785 = expanded objective point (XOP)
- 0.9776 = OP

Overbought/Oversold

Assuming that the medium term trend is up it's preferable to use oversold readings of the Detrended Oscillator or its cross below the zero level. The Oscillator is now below the zero so it's the time to wait until the bottoming signal is confirmed. Suggested levels for long entries are 0.9944, 0.9931 (.50 and .618 retracements).

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