FX.co ★ AUD/USD Elliott wave count and Fibonacci levels - May 6, 2011

AUD/USD has finished wave 0.9709-1.1011 (wave A of long term uptrend) and now is developing correction against it. Within the corrective wave there are A and B subwaves, with subwave B still developing - colored magenta in the chart. The targets of the downmove are Fibonacci retracements of 0.9709-1.1011 (wave A).

Supports:

- 1.0514 = .382 retracement
- 1.0360 = .50 retracement

If the price keeps moving up the immediate resistances will be Fibonacci retracements of 1.0876-1.0536, 1.1011-1.0536.

Resistances:

- 1.0706-17 = confluence area of .50 and .382 retracements
- 1.0746 = .618 ret
- 1.0774 = .50 ret
- 1.0830 = .618 ret

Overbought/Oversold

Assuming that the medium term trend is down it's preferable to try shorts when the Detrended Oscillator goes above the zero level (current prices) or gets into the overbought area (10-20 pips above the current prices), or hits a Fib resistance, e.g. 1.0706-17 or 1.0746-74.

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