FX.co ★ AUD/USD Elliott wave count and Fibonacci levels for May 18, 2011

AUD/USD has probably finished wave C of medium term downtrend - 1.0888-1.0504, and now we have a corrective wave that is developing. The targets of the upmove are Fibonacci retracements of 1.0888-1.0504, 1.1011-1.0504.

Resistances:

- 1.0696-98 = confluence area of .50 and .382 retracements
- 1.0741 = .618 ret
- 1.0758 = .50 ret
- 1.0817 = .618 ret

If the downtrend resumes the immediate supports will be Fibonacci retracements of 0.9709-1.1011, and expansions off 1.1011-1.0536-1.0888, 1.0888-1.0566-1.0716.

Supports:

- 1.0517-14 = confluence area of contracted objective point (COP) and .382 retracement
- 1.0413 = objective point (OP)
- 1.0394 = OP
- 1.0360 = .50 ret

Overbought/Oversold

Assuming that the medium term trend is down but a corrective wave is developing it's preferable to stand aside or try long positions when the Detrended Oscillator goes below the zero level (30-40 pips below the current prices) or gets into the oversold area (65-80 pips below the current prices).

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