AUD/USD has just developed 5 waves of medium term uptrend - colored red in the chart. The downmove that is now developing is considered wave A of the potential A-B-C cycle. The targets of this wave are Fibonacci retracements of 0.9651-1.0182, 0.9893-1.0182, and expansions off 1.0182-1.0078-1.0143.
Supports:
- 1.0079-72 = confluence area of contracted objective point (COP) and .382 retracement
- 1.0039-37 = confluence area of .50 ret and objective point (OP)
- 1.0003 = .618 ret
- 0.9975 = expanded objective point (XOP)
- 0.9871 = super expanded objective point (SXOP)
If the price continues the med term trend and breaks above 1.0182 the nearest resistances will be Fibonacci expansions off 0.9651-1.0022-0.9893.
Resistances:
- 1.0264 = OP
- 1.0493 = XOP
Overbought/Oversold
The Detrended Oscillator is firmly established below the zero level confirming the corrective downwave of a large degree. However, assuming that the prevailing uptrend is unchanged it's preferable to seek for bottoming signals to enter long when the price hits a Fibonacci support (listed above) or gets into the oversold - 15-20 pips to go.
Read more on how to apply Fibonacci studies to calculate price targets.
