The AUD/USD has developed wave 0.9803-1.0019 (wave A of medium term uptrend - colored red in the chart) and now is developing corrective wave B of the same degree. The targets of the upmove are Fibonacci retracements of 1.0255-0.9803.
Resistances:
- 1.0029 = .50 retracement
- 1.0082 = .618 ret
If the wave down continues the nearest supports will be Fibonacci retracements of 0.9803-1.0019.
Supports:
- 0.9936 = .382 ret
- 0.9911 = .50 ret
- 0.9886 = .618 ret
- 0.9854 = .764 ret
Overbought/Oversold
Assuming that medium term trend 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 (0.9940-30) which roughly corresponds to .382 retracement - 0.9936.
Read more on how to apply Fibonacci studies to calculate price targets.
