FX.co ★ AUD/USD Elliott wave count and Fibonacci levels - February 4, 2011

The AUD/USD is developing impulse subwave C (colored orange red in the chart) within wave C (colored red in the chart) of the medium term uptrend. The targets of the upmove as of now are Fibonacci expansions off 0.9803-1.0076-0.9831, 0.9831-1.0021-0.9865, 0.9865-1.0147-1.0054, 1.0054-1.0143-1.0082, 1.0082-1.0162-1.0139.

Resistances:

- 1.0188 = contracted objective point (COP), already hit
- 1.0219-26-28 = confluence area of objective point (OP), expanded objective point (XOP), and COP
- 1.0268-73 = confluence area of two XOP's
- 1.0315 = super expanded objective point (SXOP)

If the price reverses down and breaks below 1.0139 the nearest supports will be Fibonacci retracements of the wave up from 1.0054 - this wave is not developed yet.

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 to consider long positions. The Oscillator is now below the zero level, however the retracement is too shallow to open longs. The oversold area is approx. 15 pips below the current price which rougly corresponds to minor support at 1.0151 (.382 retracement).

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