The AUD/USD is developing wave 5 (colored red in the chart) of the medium term downtrend. Wave 5 has been confirmed after the price broke below 0.9960. Now the targets below the current price level are Fibonacci expansions off 1.0199-1.0106-1.0188 (waves 1-2), 1.0188-0.9960-1.0073 (waves 3-4).
Supports:
- 0.9946 = super expanded objective point (SXOP), already hit (!)
- 0.9932 = contracted objective point (COP)
- 0.9845 = objective point (OP)
If the price keeps advancing the immediate resistances will be Fibonacci retracements of 1.0073-0.9943.
Resistances:
- 1.0008 = .50 retracement, hit precisely (!)
- 1.0023 = .382 ret
Overbought/Oversold
Assuming that the medium term trend is still down, it's preferable to use overbought readings of the Detrended Oscillator or its cross above the zero level to consider short positions. The Oscillator is now slightly above the zero level and it's time to start considering shorts. The overbought area is within 15-20 pips, which roughly corresponds to 1.0008 resistance.
Read more on how to apply Fibonacci studies to calculate price targets.
