The AUD/USD has finished wave 1.0255-0.9803 (wave A of medium term downtrend - colored magenta in the chart) and now is developing corrective wave B which on smaller scale consists of subwaves A and B (colored orange red in the chart), the latter is still developing. The targets of the downmove are Fibonacci retracements of 0.9803-0.9971.
Supports:
- 0.9907 = .382 retracement
- 0.9887 = .50 ret
- 0.9867 = .618 ret
- 0.9843 = .764 ret
If the wave up continues with the break of 0.9971 the nearest resistances will be Fibonacci retracements of 1.0255-0.9803.
Resistances:
- 0.9976 = .382 ret
- 1.0029 = .50 ret
- 1.0082 = .618 ret
Overbought/Oversold
Assuming that medium term wave is up, it's preferable to use oversold readings of the Detrended Oscillator or its cross below the zero level to consider long positions. The oscillator is now at the zero and the oversold area is 25-35 pips away (0.9920-10) which roughly corresponds to .382 retracement - 0.9907.
Read more on how to apply Fibonacci studies to calculate price targets.
