FX.co ★ AUD/USD Elliott wave count and Fibonacci levels for December 30, 2011

AUD/USD is now trading within a narrow range, moving within impulse wave C of medium term downtrend (colored light green in the chart) from 1.0379. This wave has three subwaves (colored royal blue in the chart), and potential impulse subwave РЎ is still developing from 1.0218. The latter also contains smaller waves (colored magenta in the chart). However this ABC cycle may be terminated if the price breaks above 1.0202 (base of wave C). We calculate the supports using Fibonacci retracements of 0.9883-1.0218, and expansions off 1.0752-0.9663-1.0379, 1.0379-0.9861-1.0218, 1.0218-1.0051-1.0202.

Supports are the same as yesterday:

- 1.0040-35 = confluence area of .50 retracement and objective point (OP)
- 0.9997 = .618 ret
- 0.9937-32 = confluence area of .786 ret and expanded objective point (XOP)
- 0.9898 = contracted objective point (COP)

If the price keeps advancing the immediate resistances above will be Fibonacci expansions off 0.9861-1.0218-1.0044, 1.0044-1.0102-1.0045.

Resistances:

- 1.0197 = super expanded objective point (SXOP)
- 1.0265 = COP

Overbought/Oversold

Assuming that the larger wave is now moving down - and until 1.0202 is broken to the upside - it's preferable to try short positions when the Detrended Oscillator goes above the zero level (current prices) or into the overbought area (25-40 pips above the current prices), watch for entries short at or near the indicated resistances.

Read more on how to trade with Fibonacci levels.