FX.co ★ AUD/USD Elliott wave count and Fibonacci levels - May 10, 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. Wave B now has A, B and C subwaves - colored orange red in the chart. The latter subwave is still developing. The targets of the upmove are Fibonacci retracements of 1.1011-1.0536, and expansions off 1.0536-1.0802-1.0661, 1.0661-0786-1.0708.

Resistances:

- 1.0825-30-33 = confluence area of contracted objective point (COP), .618 retracement and objective point (OP)
- 1.0910 = expanded objective point (XOP)
- 1.0927 = objective point (OP)

If the downtrend resumes the immediate supports will be Fibonacci retracements of 0.9709-1.1011, 1.0536-1.0802, and expansions off 1.1011-1.0536-1.0811.

Supports:

- 1.0706 = .382 retracement
- 1.0674 = .50 ret
- 1.0641 = .618 ret
- 1.0517-14 = confluence area of COP and .382 retracement
- 1.0360 = .50 retracement
- 1.0336 = OP

Overbought/Oversold

Assuming that the medium term trend is down but a corrective wave up is developing it's preferable to stand aside or try long positions when the Detrended Oscillator goes below the zero level (current prices) or gets into the oversold area (25-45 pips below the current prices).

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